Brown-Forman has reported double-digit growth in earnings per share in its second quarter, as the company continues to reap the rewards of strong growth from its leading brands, particularly Jack Daniel's.

"The higher earnings reflect volume and profit growth for the Jack Daniel's family of brands and gross profit gains for Southern Comfort, Finlandia and most of the company's other super-premium developing brands, including Sonoma-Cutrer, Tuaca, and Woodford Reserve," the company said yesterday (30 November) in a statement.

Second quarter earnings reached US$1.00, up 10% on the same period last year. The figure benefited from a net $0.08 per share gain related to the sale of an Italian winery completed in conjunction with the company's ongoing efforts to reduce wine costs and improve the performance of Bolla Italian wines.

Excluding this net gain and adjusting comparisons for a $0.04 per share reduction in tax expense in the prior-year period, earnings per share grew 7%.

Revenues grew 10% and gross profit increased 8% in the quarter. Comparisons to the prior year were, as in the previous quarter, affected by distribution changes in Germany and Australia. The company is now responsible for the collection and remittance of excise taxes in these markets.

Jack Daniel's global depletions grew at a mid-single digit rate in the quarter, with US and international volumes both increasing in the mid-single digits. Solid volume gains in Australia, France, Italy, and Japan offset softness in the quarter for the brand in the UK, Germany, and Spain. Global volumes for Southern Comfort grew at a mid-single digit rate in the quarter, led by continued growth in the US. Finlandia volumes grew at a double-digit rate, fuelled by strong growth in Poland.

For the first six months of the fiscal year, earnings per share were $1.76, up 9% from the $1.62 earned in the same period last year. Year-to-date results benefited from solid growth for Jack Daniel's, Southern Comfort, and improved volume and profits from the Jack Daniel's & Cola ready-to-drink product that is sold primarily in Australia.

Looking forward, the company said it was narrowing the range of its full-year earnings outlook to $3.14 to $3.30 per share, representing forecasted growth of 8% to 14% over adjusted prior-year earnings of $2.90 per share. This outlook includes the current quarter's $0.08 per share gain from the sale of the company's Italian winery and additional benefits from foreign exchange. It also includes expected further reductions in global distributor inventory levels and an expected higher tax rate in the second half of the fiscal year versus the prior-year second half.

This outlook excludes the impact of the company's pending acquisition of Casa Herradura, which was announced in August. As previously communicated, the company projects the acquisition will be dilutive to earnings through fiscal 2009. In fiscal 2007 the company estimates the transaction will dilute earnings in the range of $0.08 to $0.12 per share.