US: Brown-Forman posts healthy H1 as margins improve

• Six-month net profits up by 16% to US$320.5m 
• H1 net sales rise by 2% to $1.89bn
• Operating profits jump by 12% to $484m  
• Jack Daniel’s brands net sales up by 9%

Brown-Forman has posted a double-digit increase in H1 net profits as volumes gains and price increases saw it raise its full-year outlook. 

Net profits in the six months to the end of October jumped by 16% to US$320.5m, the Kentucky-based spirits and wine group said today (5 December). Net sales increased by 2% to $1.89bn over the same period, while operating profits increased by 12% to $484m.

The numbers mirrored the group's Q1, when net profits rose by 25% in the three months to the end of July and net sales increased by 4%. Operating profits increased by 19%.

Most Brown-Forman brands saw sales rise in the first-half, with the core Jack Daniel's range recording a 9% increase, the company said. 

Finlandia’s 9% rise in net sales was driven by Russia, while premiumisation trends also helped super and ultra-premium whiskey brands, such as Gentleman Jack and Woodford Reserve, grow net sales by 21% in the first half.

Global sales of Southern Comfort fell by 5% as demand faltered in the UK and Australia, Brown-Forman said.

The US continued to to drive the company, contributing 40% of its sales growth.

However, net sales in Western Europe, including the UK and France, were down low-single digits, with ongoing economic weakness expected to “remain challenging”, the company said.

Travel Retail delivered 9% net sales growth, driven by “successful innovation, new product launches, and price increases”.

The strong overall results led to Brown-Forman raising its full-year operating profits expectations to low double-digit growth, adding: “While there continues to be uncertainty in the global economy going into the important holiday selling season, the company continues to expect high single-digit growth in underlying sales.”

The company did not release a breakdown of its second-quarter results.

To read the company's official statement, click here.