US: Brown-Forman upbeat on full-year despite slower Q1
- Q1 net profits rise by 4.9% to US$150m
- Net sales in three months to end of July lift by 2.8% to $921m
- Operating profits increase by 1.8% to $221m
- Full-year operating profits forecast to rise by between 9% and 11%
- Details of performance in terms of regions and brands available here
Brown-Forman has reiterated its full-year outlook in its Q1 results today
Brown-Forman is targeting a mid to high single-digit increase in full-year sales, although the first quarter saw sales growth slow.
The 2.8% lift in sales in the three months to the end of July followed an increase in full-year sales of 4%, released in June. Net profits were up by 4.9% compared to a jump of 11% in fiscal 2014.
CEO Paul Varga said:
“As anticipated, our first-quarter growth came in lower than what we achieved during fiscal-2014 and our expectations for fiscal-2015, due largely to pricing decisions that resulted in distributor and retail inventory reductions in the US and Europe.
“We anticipate higher rates of sales growth over the balance of the year, led by Jack Daniel’s and our portfolio of premium whiskey brands. We reaffirm our full-year guidance and our expectations of 9% to 11% underlying operating income growth in fiscal 2015.”
“The geopolitical environment remains fragile, particularly in Russia, where iconic American brands are experiencing increased scrutiny, including some of Brown-Forman’s brands. Assuming no deterioration in current global market conditions, the company is reaffirming its growth outlook for fiscal 2015, including 6% to 8% growth in reported and underlying net sales, and 9% to 11% growth in reported and underlying operating income.
“While first-quarter results were negatively impacted by inventory reductions, the company expects stronger reported and underlying results over the balance of the year, driven by more stable inventory levels and expanding global demand for the company’s portfolio of brands.
“The company also expects diluted earnings per share of $3.25 to $3.45, which now incorporates an anticipated negative impact from foreign exchange of $0.06 per share, partially offset by a lower expected tax rate of 29.5%.”
For a drilldown into Brown-Forman's Q1 by region and by brand, click here.
To read the company's full statement, click here.
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