Brown-Forman has posted a strong rise in profits for its first fiscal quarter, despite a slip in sales for the period.

The US-based drinks company said today (2 September) that net profits for the three months to the end of July climbed by 38% on the corresponding quarter a year ago, to come in at US$121.4m. Operating profits followed suit, increasing by 37% to $192m, although sales slowed by 7%, falling to $737.9m.

Brown-Forman said its sales performance in the period was affected by "global on-premise declines and trading down by consumers".

Paul Varga, the company's CEO, said: "We believe our ... strong underlying operating income growth in the quarter continued to be in the top tier of the industry. We will continue to strive for an appropriate balance of supporting our brands' growth and equity while also delivering operating expense efficiencies in this challenging economic environment."

Looking forward, brown-Forman said its fiscal 2010 full-year earnings outlook remains unchanged at between $2.60 and $3.00 per share. "We are pleased with our good start to the year but we believe the environment will remain uncertain and challenging," Varga added.

Late last year, Brown-Forman started on a strategy to offload peripheral sections of its portfolio by selling the Bolla and Fontana Candida wine brands to Gruppo Italiano Vini for an undisclosed fee.

For Brown-Forman's full announcement, click here. For Brown-Forman's last set of full-year results, click here.

An update, following the company's results conference, appears here.