Brown Forman reports strong third quarter
Luxury spirit seller Brown Forman reported third quarter results for fiscal 2018 demonstrating a healthy business that’s benefiting from rising demand for ultra-premium alcoholic drinks. However, the company’s growth wasn’t limited to any single area – it saw strong sales increases in all of its brands and segments.
Brown Forman’s share price has appreciated by 44% in the last 12 months
SOURCE: Yahoo Finance
For the third quarter, which ended January 31, 2018, the company said it saw reported net sales rise by 9%, year on year, to $878 million. On an underlying basis, this works out as 6% compared to the same period in the previous year.
Reported operating income rose by 11% (5% on an underlying basis), while diluted earnings per share increased by 4%. Both of these figures are reported against year on year.
When it came to net sales of its brands, the clear winner was the ultra premium section. Sales of American whiskey at this price point jumped up by 21% against the previous year (16% underlying), including an outperformance from Woodford Reserve at 25%.
The company’s CEO, Paul Varga, said: “Brown-Forman’s business momentum continued through the third quarter, resulting in year-to-date underlying net sales and operating income growth of 7% and 11%, respectively, and even stronger on a reported basis. The results were well-balanced by geography and driven by 8% underlying net sales growth for our Jack Daniel’s led American whiskey portfolio. Our accelerated rates of growth keep us on track to deliver high quality, top-tier results in fiscal 2018. We are reaffirming our underlying outlook for net sales growth of 6-7% and operating income of 8-9%, and adjusting our EPS range to account for tax reform and related items.”
Dominion holds Brown Forman in its Global Trends Luxury Fund.
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