Brown-Forman now expects its full-year growth to come in lower than previous forecasts

Brown-Forman now expects its full-year growth to come in lower than previous forecasts

Brown-Forman has reduced growth forecasts for its fiscal-2016 as sales in the first nine months of the year remained in the red.

In YTD results, released earlier today, the company saw its top-line in the nine months to the end of January come in 2% down on the same period a year earlier. A 1% slip in sales in the third quarter followed a decrease of 3% in the first six months, announced in December.

While net profits in Q3 were up by 2%, the bottom line came in flat for the nine months of the year so far.

On an underlying basis, sales in the year-to-date rose by 5%, with operating profits increasing by 7%.

"Against a backdrop of deteriorating economic conditions in emerging markets, weakness in the Global Travel Retail channel, and headwinds from a strengthening dollar, we had another solid quarter of underlying growth, led by the Jack Daniel's family and our American whiskey brands," said CEO Paul Varga.

"The organic growth of Jack Daniel's and our premium brand portfolio against a diversified geographic opportunity, an ever-improving portfolio positioned for sustained growth, our efficient use of capital, and the consistent return of capital to shareholders remain key ingredients in Brown-Forman's value proposition."

While flagging "significant uncertainty around the global economic environment", the company reduced its full-year forecasts, with underlying net sales expected to rise by 5% versus a 6% to 7% range estimated in December, with underlying operating profits forecast to grow by between 7% and 9%. Late last year, Brown-Forman said operating profits growth for fiscal-2016 would come in between 8% and 10%.

The company used today's results announcement to confirm completion of its Southern Comfort and Tuaca divestment to Sazerac for $542m. The sale was initially announced in January.

To read the company's official results statement, click here.

For a focus on Brown-Forman's performance on a regional and a brand basis, click here