LOUISVILLE, Ky. (AP) - Brown-Forman's third-quarter net income fell 4 percent as a strong dollar and revenue lost from brands that it sold dragged on the earnings of the maker of Jack Daniel's Tennessee Whiskey.
The Louisville, Kentucky, company expects full-year earnings to be in the range of $1.71 to $1.76 per share, the lower end of its original forecast.
Brown-Forman reported underlying net sales growth for its Jack Daniel's lineup Tuesday, as well as in its tequila and bourbon brands for the first nine months of its fiscal year.
Overall net sales growth in those nine months was hurt by the company's sale of its Southern Comfort and Tuaca brands and by unfavorable foreign exchange, it said. Foreign markets account for about 60 percent of its total sales.
Brown-Forman Corp. sold Southern Comfort and Tuaca, a premium liqueur brand, to Sazerac in a deal that closed last year.
"Against a continued challenging global backdrop for consumer staples, our third-quarter underlying sales growth accelerated nicely relative to our first half," Brown-Forman CEO Paul Varga said.
"We expect our fourth-quarter underlying sales to have a similar favorable comparison to the first half, though we now anticipate full-year underlying results at the lower end of our original forecast," he added.
The company also reported a 22 percent drop in net sales of its used barrels in the first nine months of the fiscal year. The drop was due to weaker demand and pricing pressures caused by higher supplies of used barrels.
Brown-Forman reported net income of $182 million, or 47 cents per share, in the third quarter ending Jan. 31 that included the crucial holiday period. That's compared to $190 million, or 47 cents per share, a year ago.
Net sales after excise taxes were deducted were essentially flat at $808 million.
The company said underlying net sales grew 4 percent in the U.S. during the first nine months of the fiscal year. The growth was driven by continued gains for Jack Daniel's products. Brown-Forman's bourbon brands delivered strong sales, including double-digit underlying net sales growth for Woodford Reserve and Old Forester.
Underlying net sales in Europe grew sharply from the second quarter to third quarter. Australia's underlying net sales for the nine months were flat, while results in its growing market in Japan slowed in the past quarter, the company said.
Its performance in emerging markets continued to improve in the third quarter to 5 percent growth, it said.
Underlying net sales for the entire Jack Daniel's lineup were up 3 percent in the first nine months of the fiscal year, the company said.
Woodford Reserve had a 20 percent gain during the nine months, while Herradura was up 18 percent and el jimador increased 7 percent. Underlying net sales for Finlandia vodka fell by 1 percent during the period and fell by 12 percent for Canadian Mist. Its super- and ultra-premium whiskey brands, which fetch higher prices, delivered more growth, it said.
Brown-Forman shares have risen slightly more than 6 percent since the beginning of the year. The stock has fallen roughly 7 percent in the last 12 months.
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