US: Tough Q3 drags down Beam Inc's YTD profits
- YTD net profits down 1% to US$272.2m
- Net sales up 3% to $1.81bn
- Operating profits down 16% to $482.2m
- Q3 net profits down 12% to $84.8m
- Maker's Mark YTD sales up 17%, Teacher's down 26%
Beam saw Q3 profits slide
Beam Inc has said it expects a strong final quarter to the year after a weak Q3 pushed down year-to-date profits.
Net profits were down 1% to US$272.2m in the nine months to the end of September, the Jim Beam owner said today (31 October). Net sales climbed by 3% to $1.81bn over the same period, but operating profits tumbled 16% to $482.2m.
Third-quarter figures were disappointing after a solid H1. Net profits in the three months were down 12% to $84.8m and operating profits down 10.5% to $144.9m. Net sales fell by 4.5% to $626.7m.
Beam blamed the third-quarter slump on shipment timings in the US, Australia and emerging markets that it claims knocked seven percentage points off its sales growth. However, CEO Matt Shattock said that strong performance in the US and Europe from its Bourbon brands will help it rebound in Q4 and post “good growth for the full year at the top line and even stronger growth at the bottom line”.
Shattock added: “We believe the fundamentals of our business remain strong - particularly our leadership of the Bourbon category, our strong position in the US and global routes to market and our success in driving growth through innovation. These strengths put us in a good position to drive sustained outperformance over the long term.”
Of Beam's core brands, Maker's Mark posted the highest sales growth in YTD, up 17%. Jim Beam was up 3% over the same period, however Teacher's, which is undergoing a review in India after allegations of violations of the US Foreign Corrupt Practices Act involving Beam's operations in the country, posted a 22% YTD comparable sales drop.
Beam yesterday suffered a 3.5% share price drop ahead of today's results.
To read Beam's full statement, click here.
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