US: Brown-Forman posts healthy H1 as margins improve

By | 5 December 2012

  • Six-month net profits up by 16% to US$320.5m 
  • H1 net sales rise by 2% to $1.89bn
  • Operating profits jump by 12% to $484m  
  • Jack Daniel’s brands net sales up by 9%
Brown-Forman released its H1 results today

Brown-Forman released its H1 results today

Brown-Forman has posted a double-digit increase in H1 net profits as volumes gains and price increases saw it raise its full-year outlook. 

Net profits in the six months to the end of October jumped by 16% to US$320.5m, the Kentucky-based spirits and wine group said today (5 December). Net sales increased by 2% to $1.89bn over the same period, while operating profits increased by 12% to $484m.

The numbers mirrored the group's Q1, when net profits rose by 25% in the three months to the end of July and net sales increased by 4%. Operating profits increased by 19%.

Most Brown-Forman brands saw sales rise in the first-half, with the core Jack Daniel's range recording a 9% increase, the company said. 

Finlandia’s 9% rise in net sales was driven by Russia, while premiumisation trends also helped super and ultra-premium whiskey brands, such as Gentleman Jack and Woodford Reserve, grow net sales by 21% in the first half.

Global sales of Southern Comfort fell by 5% as demand faltered in the UK and Australia, Brown-Forman said.

The US continued to to drive the company, contributing 40% of its sales growth.

However, net sales in Western Europe, including the UK and France, were down low-single digits, with ongoing economic weakness expected to “remain challenging”, the company said.

Travel Retail delivered 9% net sales growth, driven by “successful innovation, new product launches, and price increases”.

The strong overall results led to Brown-Forman raising its full-year operating profits expectations to low double-digit growth, adding: “While there continues to be uncertainty in the global economy going into the important holiday selling season, the company continues to expect high single-digit growth in underlying sales.”

The company did not release a breakdown of its second-quarter results.

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

Expert analysis

Brown-Forman Corporation (BF.B) - Financial and Strategic SWOT Analysis Review

Brown-Forman Corporation (Brown-Forman) is one of the largest American-owned spirits and wine companies in the world. The company is engaged in the manufacture, bottling, import, export, and marketing of a wide variety of alcoholic beverage brands. It offers a wide range of whiskies, vodka, gin, liqueur, tequila, and champagne through a portfolio of more than 30 brands, including Jack Daniel's, Southern Comfort, Canadian Mist, Fetzer, and Korbel. The company offers its products in more than 135 countries across the world. It's largest operations are in the United States, Poland, Australia, the United Kingdom, Mexico, and Germany. The company is headquartered in Kentucky, the US.

Sectors: Company results, Spirits

Companies: Brown-Forman, Jack Daniel’s, Finlandia, Southern Comfort

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