Maker of Jack Daniels Tennessee whiskey, the Brown-Forman Corp. has cut down on its outlook for the current financial year. This is due to a volatile economic environment and the challenges it faces in the environment for consumer staples.
The company expects a fall in net sales, where in the previous year it was 4% to 5% and the current year it’s expecting 3% to 4% growth. The earnings per share expected to be posted are between USD1.71 and USD1.76, having 5 cents shaved off the higher end of its previous forecast.
Brown-Forman, in order to focus on Jack Daniel’s (JD) and Woodford Reserve, sold Southern Comfort and Tuaca for USD543.5 million to Sazerac Co, in 2016. This move came following the struggles the two liquors were facing, and also because of the surge in American whiskey sales in recent years, which caused the focus to shift on JD and Woodford Reserve. The company also bought BenRiach Distiller Company Ltd for USD341 million, adding Scotch whisky to its expanding portfolio of American, Canadian and Irish whiskeys.
In the company’s fiscal year, the first nine months witnessed underlying sales of the Jack Daniel brands rise at 3%, and Woodford Reserve sales at 20%. The company mentioned that it had increased prices on some of the higher-end whiskey brands to re-instill their premium positions in the market.
The Canadian Mist, one of their brands, fell behind, with sales falling 12% in the first three quarters of the year.
The company reported that in its latest quarter it saw a profit of USD182 million, which is a fall from USD190 million, the year before. Number of shares outstanding fell to 4.4% and profit was at 47 cents on per-share basis.