Brown-Forman reported its Q3 and YTD 2017 results today

Brown-Forman reported its Q3 and YTD 2017 results today

Earlier today, Brown-Forman reported a dip in both sales and profits for the first nine months of its fiscal-2017. Here, just-drinks takes a closer look at the company's sales performance by market and by brand in the nine months to the end of January. 

Performance by market

  • The US - -1% reported, +4% organic

The Jack Daniel's portfolio continues to drive Brown-Forman's performance in the US market. Jack Daniel's Tennessee Whiskey saw 4% growth in both reported and organic sales, thanks to volume gains and "modest" price increases, the company said.

Bourbon brands Woodford Reserve and Old Forester enjoyed double-digit organic net sales growth, as did the firm's Herradura and El Jimador Tequilas.

Sonoma-Cutrer saw organic net sales increase by high single-digits, while Korbel was up low single-digits.

  • Developed markets - -3% reported, +3% organic

The company saw an organic net sales swing in Europe, from -1% in the second quarter to 6% in the third. Brown-Forman said this was down to the timing of promotional activity and customer purchases in the UK and Germany

Australia's year-to-date organic net sales came in flat. Brown-Forman blamed a weak economy and "high excise tax environment".

In Japan, the firm said a slow-down in the third quarter was down to "buy-ins related to the large price increases the company implemented this past Fall".

  • Emerging Markets - -8% reported, +1% organic

Year-to-date net sales were driven by a strong third quarter in Brown-Forman's emerging markets. In the three months to the end of January, the company reported 5% organic sales growth (-1% reported). Mexico and Poland helped to drive growth, boosted by Jack Daniel's Tennessee Whiskey. Mexico also benefited from solid growth for New Mix RTDs, Herradura and Jack Daniel's RTDs.

Meanwhile, in Russia and Turkey, year-to-date net sales remain down due to a sluggish start to the year. However, Russia returned to growth in organic terms in the third quarter and Turkey's third quarter organic results "appear to have stabilised".

Organic net sales declined by double digits in China, Brazil and Thailand, while Ukraine boasted double-digit gains. Brown-Forman said weaker economic conditions combined with an appreciated US dollar hit consumer purchasing power in many emerging markets.

  • Global Travel Retail - +1% reported, +7% organic

Brown-Forman hailed a "solid rebound" for its GTR unit as Woodford Reserve gained distribution and the Jack Daniel's portfolio benefited from activity around the brand's 150th anniversary. The firm called year-to-date trading patterns "more normal" compared to the year prior.

Performance by Brand

Brown-Forman Year-to-Date 2017 - Brand Performance vs 2016

BrandVolumesReported SalesOrganic Sales
Jack Daniels Family+4%+1%+3%
Jack Daniels Tennessee Whiskey+1%---+2%
Jack Daniels Tennessee Honey+5%+1%+3%
Other Jack Daniels whiskey brands+9%+5%+4%
Jack Daniels RTD/RTP+7%+2%+5%
Finlandia----10%-1%
El Jimador+2%----7%
New Mix RTD+8%---+16%
Herradura+14%+11%+18%
Woodford Reserve+19%+15%+20%
Canadian Mist-8%+11%-12%
Rest of brand portfolio (excl. discontinued brands)-2%-2%+2%
Total+4%-3%+3%

Source: Company results

The Jack Daniel's portfolio led organic net sales growth, up 3% (+1% reported), thanks largely to its home US market. Tennessee Honey grew in line with the portfolio in "most markets", while Tennessee Fire saw a double-digit sales jump as it continues to roll out beyond the US. A strong performance in the US on-premise more than offset off-premise declines for Tennessee Fire. Jack Daniel's RTD/RTP business and Gentleman Jack saw organic sales lift by mid-single-digits, propelled by continued growth outside of the US.

The firm's super- and ultra-premium whiskey brands, which include Woodford Reserve and Woodford Reserve Double Oaked, Jack Daniel's Single Barrel and Gentleman Jack, delivered "strong rates of aggregate growth". 

Price increases for Old Forester and Woodford Reserve have helped reinforce premium brand credentials, Brown-Forman said, with Woodford Reserve organic sales up 20% (+15% reported), while Old Forester grew at "an even faster rate".

Finlandia vodka saw year-to-date sales slip by 1% in organic terms (down 10% on a reported basis). However, the embattled vodka brand saw a boost in the third quarter, thanks to its return to growth in Russia. Year-to-date sales in Poland were down, thanks to economic headwinds and a competitive environment for premium vodka.

Gains in the US helped boost organic sales for El Jimador by 7% (0% reported). Sales in Mexico were down for the Tequila brand as Brown-Forman continues to reposition El Jimador through multi-year price increases, which caused "modest" volume declines.

El Jimador RTD New Mix saw organic sales jump 16% (0% reported) thanks to continued growth in takeaway trends. 

Herradura enjoyed a sales boost of 18% (+11% reported), driven by both the US and Mexico.

Brown-Forman Year-to-Date 2017 results - Click here for just-drinks' full round-up