Brown-Forman Reports Strong Annual Results
US-based spirits group Brown-Forman Corporation has increased net sales by 4% to $3.95 billion (up 6% on an underlying basis) and operating income by 8% to $971 million (11% on an underlying basis) for the year ended April 30, 2014. The growth in underlying net sales was fuelled by the strength of the company’s premium whiskey portfolio, as well as broad-based geographic gains. Price/mix contributed three points to net sales growth and gross margin expanded 100bps.
The Jack Daniel’s family of brands grew underlying net sales 8%. The company’s super and ultra-premium whiskey brands grew underlying net sales 19%. Finlandia’s family of brands grew underlying net sales 4%.
Brown-Forman enjoyed solid gains in both the emerging markets and the developed world. Underlying net sales grew 4% (+4% reported) in the United States, 6% (+1% reported) in developed markets outside of the United States, and 9% (+8% reported) in the emerging markets. Other markets outside of the top ten representing 16% of net sales delivered an impressive 15% underlying net sales growth rate (+13% reported), and are becoming increasingly important contributors to the company’s growth.
The underlying operating income increase of 11% was driven by top-line growth and gross margin expansion.
Paul Varga, chief executive of Brown-Forman, comments: “We are pleased to report another fiscal year of excellent organic growth, particularly in light of the moderating growth rates of our global competitors. I believe that our leadership position in premium American whiskey, led by the one and only Jack Daniel’s trademark, and a very balanced geographic contribution, underpin the company’s differentiated performance. We remain optimistic about the organic growth prospects for Brown-Forman, and our investment posture and fiscal 2015 earnings outlook reflect that optimism.”
