Brown-Forman posts 12 per cent profit increase in 3rd Qtr, gets a lift from Jack Daniel's brand

LOUISVILLE, Ky. – Brown-Forman Corp.’s whiskey lineup, led by its flagship Jack Daniel’s brand, stirred a 12 per cent increase in third-quarter net income as the spirits maker reported broad sales gain in the U.S. and overseas.

The company behind such other brands as Southern Comfort, Finlandia and el Jimador beat Wall Street forecasts for the three-month period. It also raised its full-year earnings outlook.

Its shares rose more than 4 per cent in morning trading Wednesday.

“We delivered great top- and bottom-line results in the third quarter, continuing the momentum from the first half,” said Brown-Forman CEO Paul Varga. “We believe our top-tier performance was due primarily to the global strength of the Jack Daniel’s trademark,” along with its brand innovations, its performance across various price levels and its “limited exposure to some of the emerging markets that have decelerated.”

Overall, the company reported net income of $177 million, or 82 cents per share, for the three months ending Jan. 31. That’s up from $157 million, or 73 cents per share, a year ago. Quarterly net sales rose 5 per cent to nearly $1.08 billion.

Analysts expected earnings of 75 cents per share on revenue of $1.08 billion.

For the first nine months of the fiscal year, net sales for the entire Jack Daniel’s brand increased 8 per cent, when excluding currency swings, the company said Wednesday. It reported continued strong sales for Jack Daniel’s Tennessee Honey.

The Louisville-based company’s premium Woodford Reserve bourbon brand had strong double-digit net sales growth during the nine-month period. Its venerable Old Forester bourbon also posted double-digit growth, it said.

The company reported 3 per cent growth in U.S. net sales on a constant-currency basis for the nine-month period.

In developed markets outside the U.S., its net sales grew 5 per cent for the nine months when excluding foreign currency swings. It reported double-digit growth in the United Kingdom, Japan and France, along with high single-digit growth in Germany.

In other markets, the company posted double-digit net sales gains in China, Brazil, Russia, Thailand, Turkey and India.

The company boosted its full-year forecast to a range of $2.95 and $3.05 per share, up from a range of $2.80 to $3 per share. Analysts expected $2.96 per share for the year.

The performance among its brands was mixed during the nine-month period.

Net sales for Finlandia vodka products rose 7 per cent when excluding currency swings. Net sales for the el Jimador tequila lineup dropped 5 per cent on the same constant-currency basis, and sales for the Southern Comfort brand also were down 5 per cent.

Sales for Korbel Champagne rose 3 per cent, while Canadian Mist sales slipped 1 per cent.

Brown Forman’s Class B shares rose $3.09, or 3.7 per cent, to $87.10 in morning g trading. They are up 28 per cent since a year ago.