US: Slowing SoCo tempers Brown-Forman FY forecast
Brown-Forman has narrowed its full-year forecast, following the release of its third quarter results.
The US-based wine and spirits company said late last week that sales in the three months to the end of January climbed by 16% year-on-year to US$877.4m. Net income, meanwhile, increased by 10% to $116m.
The company credited the addition of profits from the Casa Herradura Tequila brands, acquired early last year, benefits from favourable foreign exchange fluctuations, higher global consumer demand for Jack Daniel's Tennessee Whiskey and Finlandia Vodka, an "exceptional" increase in US demand for Gentleman Jack, and "continued excellent growth" for the Jack Daniel's & Cola RTD in Australia as contributing to profit growth for the quarter.
Partially offsetting these gains, however, were softness for Southern Comfort and higher raw material costs. Global depletions for Southern Comfort declined for the three-month period, with weakness in both the US and international markets, Brown-Forman noted.
For the first nine months of its fiscal year, sales were up by 19% at $2.51bn, with net income coming in 6% up at $340.7m.
Looking forward, Brown-Forman said it expects full-year earnings to total in the region of $3.42 to $3.50 per diluted share, representing forecast growth of 9% to 11% for 2007-2008. In November, the company said it expected full-year earnings to come in between $3.42 and $3.54 per share.
"Our earnings expectations for the fourth quarter include continued global growth for the company's brands, an expected lower tax rate, and modest additional benefits from foreign exchange," the company said.
"This outlook is tempered by a challenging economic environment and expectations of higher energy and grain costs."
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