BF.B Brown Forman Corp

Brown-Forman Corp., the maker of Jack Daniel's Tennessee whiskey, said divestures of two liquor brands drove fiscal fourth-quarter results higher and helped offset weakness in emerging markets.

The Louisville, Ky., company in January said it struck a deal to sell Southern Comfort, its struggling sweet whiskey-flavored liquor and Tuaca, an Italian liqueur, for $543.5 million to Sazerac Co. The sale was part of Brown-Forman's push to focus on Jack Daniel's and Woodford Reserve, which have grown in recent years behind a surge in American whiskey sales.

Meanwhile, the company has been shifting advertising dollars away from emerging markets across Asia and elsewhere, where demand has dwindled due to economic downturns. In March, Chief Executive Paul Varga said the company would remain committed to emerging markets in the long term, but noted that it would step up efforts to increase American whiskey sales in more stable economies.

On Wednesday, Mr. Varga called the company's recently-ended fiscal year "a tale of two halves," with emerging market sales rising by 8% in the first half of the year before paring that decline to 1% in the second half. Mr. Varga noted "some signs of stabilization" as fourth-quarter sales in those markets matched third-quarter sales, but said countries in Asia and Russia continued to log double-digit sales drops.

Continued growth in the company's Jack Daniel's portfolio helped offset weakness in foreign sales. Revenue from Jack Daniel's brands rose 6% during the year, resulting in an overall decline of 2.1% for the full year.

In its latest quarter, ended April 30, Brown-Forman said total sales slipped 1.5% from a year earlier, to $933 million. That topped the $899 million analysts polled by Thomson Reuters had predicted.

The company reported a profit of $522 million, or $2.60 a share, up from $140 million, or 66 cents a share, a year earlier. The result includes a $485 million gain on the sales of Southern Comfort and Tuaca. Excluding that gain, earnings per share were 81 cents, the company said, a penny short of analysts' estimate.

For its newly started business year, Brown-Forman gave guidance that brackets analysts' average estimate. The company expects to post $3.42 to $3.62 in per-share profit, compared with the $3.58 analysts have predicted.

Shares in the company, down 2% this year through Tuesday's close, were inactive during premarket trading.

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

(END) Dow Jones Newswires

June 08, 2016 09:25 ET (13:25 GMT)

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