BF.B Brown Forman Corp

By Lisa Beilfuss 

Brown-Forman Corp. cut its earnings outlook for the year after the maker of Jack Daniel's whiskey said sales slipped in its latest quarter, pinched by slowing emerging markets and the strong U.S. dollar.

In updating its guidance for its fiscal year ending in April, the company cited "significant uncertainty around the global economic environment" and said its revised forecast assumes no further deterioration in the global economy, particularly in the emerging markets.

Brown-Forman now sees per-share earnings between $3.32 and $3.42, down from its earlier view of $3.40 to $3.60 and short of the $3.44 analysts have expected.

The Louisville, Ky., company has grappled with dropping demand from emerging markets, exacerbated by unfavorable exchange rates and lower spending from tourists. In the latest quarter, Brown-Forman saw emerging market sales slide 11%, dragged by weakness in Poland, Russia, southeast Asia and parts of South America. Meanwhile, sales in the company's travel retail segment tumbled 24% as traveler's spent less.

Weakness in those markets was countered by a 5% rise in domestic sales, driven by higher volumes, the rollout of Jack Daniel's Tennessee Fire. Sales in the overall Jack Daniel's segment slipped 1%; adjusted for currencies, revenue there rose 7%.

Brown-Forman has been moving to divest itself of struggling and noncore brands, sharpening its focuses on Jack Daniel's and Woodford Reserve, which have grown in recent years as Americans' growing demand for whiskey have sent sales soaring. In January, the company struck a deal to sell its Southern Comfort and Tuaca liqueur brands for $543.5 million to Sazerac Co.

Over all for the quarter ended Jan. 31, the company reported a profit of $190 million, or 94 cents a share, up from $186 million, or 87 cents, a year earlier. Revenue edged 0.9% lower to $1.08 billion.

Analysts projected 94 cents in per-share profit and $1.10 billion in revenue, according to FactSet.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

March 02, 2016 08:56 ET (13:56 GMT)

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