US: Brown-Forman narrows FY guidance as sales slip
Brown-Forman cautious on sales outlook
Brown-Forman has said that full-year earnings remain on-track to meet the firm's guidance range, despite a dip in sales for the first nine months of its fiscal year.
Net sales slipped to US$2.5bn for the nine months to the end of December, down 1% on the same period of the previous year, the owner of Jack Daniel's whiskey said today (10 March).
Net profits rose, meanwhile, by 6% for the nine-month period, to $376.5m from $354.8m a year earlier. Operating profits rose by 10% to $591.5m, boosted by job cuts, lower advertising spend and reduced administration costs.
Brown-Forman reiterated that full-year earnings per share are expected to meet guidance, although it narrowed the range to $2.98 to $3.08, compared to a previous range of $2.95 to $3.15.
The firm also sounded a cautious note on spirits trends.
"We remain concerned about the impact on consumption trends from a soft on-premise channel, consumer trading-down, and heightened competitive activity," it said.
"While we anticipate overall operating expenses to decline for fiscal year 2010, year-to-date trends are expected to moderate as underlying investments in both advertising and selling, general, and administrative expenses are expected to be higher in the fourth quarter when compared to the same prior year period."
Growth for RTD brands, as well as Jack Daniel's and El Jimador Tequila, helped to mitigate declines for Southern Comfort and Finlandia over the nine months, said Brown-Forman.
Third quarter net sales rose by 10% to $861.7m, although net profits for the three months fell by 13% to $108m, partially due to unfavourable currency rates and a one-off charge on the Don Eduardo brand.
For the full announcement, click here.
For an update, following the group's conference call, click here.
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