US: Inventory rebalances hamper Brown-Forman in Q3

By Chris Mercer | 7 March 2012

  • Q3 net profits dip by 5% to US$140.7m
  • Sales come in flat for three months to 31 January, at $962.4m
  • Operating profits slip by 9% to $225.5m
  • Narrows FY earnings guidance to between $3.50 and $3.65 from earlier $3.45 to $3.70 range
Brown-Forman issued its Q3 results earlier today

Brown-Forman issued its Q3 results earlier today

Brown-Forman has seen the "expected downward rebalancing of distributor inventories" in the US slow its fiscal-year performance in the third quarter.

Lower third-quarter profits and flat net sales dented Brown-Forman's momentum from the first-half, the firm reported today (7 March). However it said that results were in-line with its expectations.

The Jack Daniel's whiskey distiller narrowed its full-year guidance range for diluted earnings per share to between US$3.5 and $3.65.  In December, Brown-Forman cut the top-end of its guidance to $3.7, from $3.85 previously, with the low-point of the range remaining steady at $3.45.

Brown-Forman's CEO, Paul Varga, said: "Our underlying results were in line with our expectations for the quarter and year-to-date and we believe are on par with overall industry growth rates." The group largely blamed flat net sales in the third quarter on distributor stockpiling in the previous quarter, ahead of planned price increases. Net sales came in at $962.4m.

Meanwhile, third-quarter operating profits fell by 9% on the same period of last year, to $225.9m, with net profits slipping by 5% to $140.7m. Despite this, Brown-Forman's net sales for the first nine months of the year still increased by 8%, to $2.8bn. Nine-month operating and net profits crept up by 1% each, to $638.3m and $408.7m respectively.  

Jack Daniel's whiskies continued to perform well in the US, driven by super-premium varieties such as Gentleman Jack. Further afield, the group highlighted Germany, Mexico, Russia, France, Brazil, Turkey and Canada as key drivers of international sales.

Click here to read Brown-Forman's official results announcement.

Expert analysis

Brown-Forman Corporation: Company Profile and SWOT Analysis

Synopsis ICD Research's "Brown-Forman Corporation: Company Profile and SWOT Analysis" contains in depth information and data about the company and its operations. The profile contains a company overview, business description, financial ratios, SWOT analysis, key facts, information on products and services, details of locations and subsidiaries, plus information on key news events affecting the company. Summary This SWOT analysis and company profile is a crucial resource for industry executives and anyone looking to gain a better understanding of the company's business. ICD Research's "Brown-Forman Corporation: Company Profile and SWOT Analysis" report utilizes a wide range of primary and secondary sources, which are analyzed and presented in a consistent and easily accessible format. ICD Research strictly follows a standardized research methodology to ensure high levels of data quality and these characteristics guarantee a unique report. Scope • Examines and identifies key information and issues about "Brown-Forman Corporation" for business intelligence requirements • Studies and presents the company's strengths, weaknesses, opportunities (growth potential) and threats (competition). Strategic and operational business information is objectively reported • Provides analysis on financial ratios of the company • The profile also contains information on business operations, company history, major products and services, prospects, key competitors, key employees, locations and subsidiaries Reasons To Buy • Quickly enhance your understanding of the company • Gain insight into the marketplace and a better understanding of internal and external factors which could impact the industry • Increase business/sales activities by understanding your competitors’ businesses better • Recognize potential partnerships and suppliers • Obtain yearly profitability figures Key Highlights Brown-Forman Corporation (Brown-Forman) is a US based spirits and wine company. The firm brews, bot

Sectors: Company results, Spirits, Wine

Companies: Brown-Forman, Jack Daniel’s

View next/previous articles

Currently reading -

US: Inventory rebalances hamper Brown-Forman in Q3

There are currently no comments on this article

Be the first to comment on this article

Related research


This report analyzes the worldwide markets for Wine in Million Litres. It includes all wine categories, still, (red, white and rose), sparkling, fortified, vermouth, non-grape wine, wine coolers and ice wine. The report provides separate comprehensiv...

Related articles

just the Round-Up - The week in drinks

The top ten stories published on just-drinks last week

US: Brown-Forman's earnings to accelerate as US recovers - analyst

Brown-Forman has scope to deliver earnings growth ahead of forecasts as momentum returns to the US economy, according to an analyst.

US: Brown-Forman welcomes strong Q1 performance

Brown-Forman has hailed a "great start" to its fiscal year, with rising profits helped by price increases in Q1.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page