LOUISVILLE, Ky. (AP) — Strong demand for its Jack Daniel's brand and other premium whiskeys helped liquor producer Brown-Forman Corp's net income rise 19 percent.
The strength in whiskey more than offset a shakier performance by some of the company's other spirits.
The company on Wednesday reported net sales gains in the U.S. and overseas in the first six months of the year. It reaffirmed its full-year earnings outlook between $2.80 and $3 per share.
"I'm very pleased with how the company has continued to perform and be positioned, particularly in light of what appears to be a more moderate posture from most of our publicly traded global competitors," Brown-Forman CEO Paul Varga said during a conference call with industry analysts.
Leading the way was the full Jack Daniel's lineup, which saw an 8 percent increase in net sales over the first six months of the year when excluding currency swings, the company said. That led a round of strong sales for the Louisville-based company's whiskey brands.
The company reported surging sales for Jack Daniel's Tennessee Honey, driven by the product's introduction in several overseas markets and its continued growth in the U.S. More double-digit growth is expected in coming months for the honey-infused whiskey but at a less robust rate, the company said.
Brown-Forman reported double-digit net sales growth in the quarter for its pricier whiskey brands such as Jack Daniel's Single Barrel, Gentleman Jack and Woodford Reserve bourbon.
Its venerable Old Forester bourbon also had strong quarterly sales growth, and the company is "repositioning the brand at a more premium price point," Chief Financial Officer Don Berg said.
The company's executives said one key category remains sluggish — out-on-the-town drinking at bars and restaurants.
"It doesn't look like it's growing at all and could even be slightly declining," Berg said.
Overall, Brown-Forman reported net income of $206 million, or 96 cents per share, in the quarter that ended Oct. 31. That's up from $173 million, or 80 cents per share, the year before. Quarterly net sales rose 6 percent to $1.08 billion.
Analysts surveyed by FactSet expected earnings of 91 cents per share on net sales of $1.11 billion.
The net income growth reflected sales gains across the spectrum of global markets.
In the U.S., net sales in the six-month period grew by 5 percent, excluding distributor inventory changes, the company said. In developed markets overseas, those sales grew by 7 percent, excluding foreign currency swings and inventory changes. The upswing was led by double-digit growth in the United Kingdom, France and Japan.
Sales gains also occurred in emerging markets, with especially strong performances in Russia, China, Brazil, Thailand, Turkey and India, the company said.
Meanwhile, net sales for the six-month period dropped for some of the company's other key brands.
Net sales for the el Jimador tequila lineup dropped 8 percent when excluding currency swings.
Net sales for Finlandia vodka products fell 2 percent, and sales for the Southern Comfort brand were down 5 percent on the same constant-currency basis.
Sales for Korbel Champagne rose 3 percent, while Canadian Mist sales slipped by 1 percent.
Brown-Forman Class B shares were trading at $74.74, up 24 cents, in midday Wednesday trading.
