US: Brown-Forman confident despite Q1 profits slip
- Profits down 8%
- Sales rise 1% on international markets
- Firm expects profits to improve
Non-US markets boost Brown-Forman in Q1
Jack Daniel whiskey distiller Brown-Forman has held its full-year profits guidance, despite a slip in earnings in the first quarter of its fiscal year.
Unfavourable currency rates and distribution costs caused Brown-Forman to report a 10% drop in operating profits for the three months to the end of July, to US$173m. Net profits slipped by 8% on the same period of last year, to $111.4m, the drinks firm said today (1 September).
The result overshadowed a 1% increase in net sales for the three months, to $744.9m. Gains for Jack Daniel's whiskey and Finlandia vodka outside of the group's core US market drove sales forward. El Jimador Tequila also reported strong demand, but sales of Southern Comfort whiskey declined during the quarter.
Looking forward, Brown-Forman said that it remained upbeat about the rest of the year. “We expect net sales to continue to grow in line with trends of the prior two quarters, operating expenses to moderate later in the year, and underlying operating income to grow in the mid-single digits for the full fiscal year,” said group CEO Paul Varga.
The firm said it expected full-year earnings per share of between $2.98 and $3.38, as previously announced.
However, it added: "Many uncertainties persist including potential improvements or deterioration of the global economic and consumer environments, predominantly as they relate to the US market and the Southern Comfort brand."
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