US: Inventory rebalances hamper Brown-Forman in Q3
- Q3 net profits dip by 5% to US$140.7m
- Sales come in flat for three months to 31 January, at $962.4m
- Operating profits slip by 9% to $225.5m
- Narrows FY earnings guidance to between $3.50 and $3.65 from earlier $3.45 to $3.70 range
Brown-Forman issued its Q3 results earlier today
Brown-Forman has seen the "expected downward rebalancing of distributor inventories" in the US slow its fiscal-year performance in the third quarter.
Lower third-quarter profits and flat net sales dented Brown-Forman's momentum from the first-half, the firm reported today (7 March). However it said that results were in-line with its expectations.
The Jack Daniel's whiskey distiller narrowed its full-year guidance range for diluted earnings per share to between US$3.5 and $3.65. In December, Brown-Forman cut the top-end of its guidance to $3.7, from $3.85 previously, with the low-point of the range remaining steady at $3.45.
Brown-Forman's CEO, Paul Varga, said: "Our underlying results were in line with our expectations for the quarter and year-to-date and we believe are on par with overall industry growth rates." The group largely blamed flat net sales in the third quarter on distributor stockpiling in the previous quarter, ahead of planned price increases. Net sales came in at $962.4m.
Meanwhile, third-quarter operating profits fell by 9% on the same period of last year, to $225.9m, with net profits slipping by 5% to $140.7m. Despite this, Brown-Forman's net sales for the first nine months of the year still increased by 8%, to $2.8bn. Nine-month operating and net profits crept up by 1% each, to $638.3m and $408.7m respectively.
Jack Daniel's whiskies continued to perform well in the US, driven by super-premium varieties such as Gentleman Jack. Further afield, the group highlighted Germany, Mexico, Russia, France, Brazil, Turkey and Canada as key drivers of international sales.
Click here to read Brown-Forman's official results announcement.
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