Jack Daniel's parent Brown-Forman's stock falls after revenue falls short of estimates

By Ciara Linnane

Company says inventory reductions across the spirits value chain weighed in latest quarter

Brown-Forman Corp.'s stock fell 4% Wednesday after the Jack Daniel's parent missed revenue estimates for its fiscal fourth quarter, offsetting a profit beat.

Louisville, Ky.-based Brown-Forman (BF.A) (BF.B) had net income of $266 million, or 56 cents a share, for the quarter to April 30, up 29% from $207 million, or 43 cents a share, in the year-earlier period.

Sales fell 8% to $964 million from $1.046 billion a year ago.

The FactSet consensus was for earnings per share of 41 cents and sales of $1.028 billion.

"While our fiscal 2024 organic results reflect the inventory reductions across the entire spirits value chain, when you adjust for the changes in distributor inventory, we feel good about the results we delivered and are confident in the strength of our strategy, brands and business," CEO Lawson Whiting said in prepared remarks.

For all of fiscal 2024, Jack Daniel's Tennessee Whiskey saw net sales fall 6%, while Diplomático rum and Gin Mare drove the rest of the portfolio's net sales growth of 61%.

Net sales at the new mix segment rose 32%.

By geography, U.S. sales fell 4%, while sales in developed international markets fell 2%. The travel retail channel saw sales rise 8%, driven by superpremium whiskeys. In emerging markets, sales rose 5%, led by strong growth of new mix in Mexico and of Jack Daniel's Tennessee Apple in Brazil.

Brown-Forman is now expecting organic sales growth in the 2% to 4% range for fiscal 2025. Organic sales exclude the impact of foreign currency and acquisitions.

"We anticipate a return to growth for organic net sales and organic operating income in fiscal 2025 driven by gains in international markets and the benefit of normalizing inventory trends," the company said. "This outlook is tempered by our belief that global macroeconomic and geopolitical uncertainties will continue to create a challenging operating environment."

The stock has fallen 23% in the year to date, while the S&P 500 has gained 11%.

-Ciara Linnane

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06-05-24 1039ET

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