Jack Daniel's Maker Brown-Forman Lowers Earnings Guidance
March 02 2016 - 8:20AM
Dow Jones News
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 09:05 ET (14:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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