US: Brown-Forman FY sales, profits fall on tough Q4

Brown-Forman has reported falls in both sales and profits for its fiscal full-year, damaged by double-digit declines in its fourth quarter.

Net income for the 12 months to the end of April slipped by 1% to $434m, with net sales down 3% to $3.19bn, said Brown-Forman today (10 June).

The group, which owns Jack Daniel's whiskey and Finlandia vodka, was hammered in its fourth quarter, reporting a 12% drop in sales and a 19% drop in net earnings, which were partly affected by one-off costs relating to the firm's decision to cut 250 jobs from its 4,100-strong workforce.

Despite the falls, FY diluted earnings per share (EPS) of $2.87 was at the higher end of B-F's guidance range of $2.7 to $2.9, which it reduced from $3 to $3.2 earlier this year. EPS for the previous year was $2.84.

"Given today's global economy, we are pleased with our company's fiscal 2009 results," said B-F CEO Paul Varga.

Operating income rose by 4% on an underlying basis, B-F said, adding that operating margin remained broadly flat against 2008 following cost cutting measures, including a reduction in performance-related bonuses for staff.

Jack Daniel's, Finlandia and Gentleman Jack drove B-F sales during the year, but higher prices failed to offset higher input costs.

In the group's outlook for fiscal 2010, Varga said: "We are assuming that the business challenges and uncertainty of today will persist during fiscal 2010. While we expect foreign exchange to negatively affect reported earnings and recognise the possibility that further inventory reductions may occur, we are targeting modest growth in underlying operating income."