Jack Daniels growth rate in emerging markets has slowed in Brown-Formans year-to-date

Jack Daniel's growth rate in emerging markets has slowed in Brown-Forman's year-to-date

The CFO of Brown-Forman has flagged tough conditions in the company's emerging markets as well as weakness in the Travel Retail sector, as the group reduced growth forecasts for fiscal-2016.

Speaking to analysts yesterday following the company's Q3 and year-to-date results, Jane Morreau said the company's latest set of numbers reflect two different economic realities: "On the one hand," she said, "we delivered strong and consistent growth in the developed world, where underlying net sales were up 6% year-to-date. On the other hand, we experienced decelerating results in the emerging markets and continued weakness in our Global Travel Retail channel."

For the first time in "several years", emerging markets under-performed developed ones, according to Morreau.

"Historically, Jack Daniel's Tennessee Whiskey has been growing in the mid- to high-teens in the emerging markets, fuelled by strong market share gains," she said. "But, the deteriorating economic conditions and worsening spirits trends have temporarily slowed Jack Daniel's underlying net sales growth into the high single-digits."

Meanwhile, the Travel Retail sector remained under pressure in the third quarter, "resulting in a 13% year-to-date decline". 

"While we are disappointed that our growth has moderated slightly due to the deteriorating economic conditions throughout the emerging economies of the world, our view remains unchanged that these economies will become increasingly important growth drivers for the company over the coming years," Morreau added.

For a look at Brown-Forman's year-to-date performance on a regional and a brand basis, click here