The company's new Jack Daniel's Tennessee Honey continues to be a hit. CEO Paul Varga explained on the conference call that the company was anxious Honey might cannibalize sales from its much more famous flavored whiskey (Southern Comfort), but that has not happened.
Sales were flat for the quarter and operating income was down 9% because of advanced purchasing in several markets as well as increased advertising. The company is cautious about taking price, despite the strength of brands, due to the weak economy. Management emphasized that for the first nine months of the fiscal year revenue and operating income are still up and diluted EPS is up 8%.
For a family-controlled company of Brown-Forman's strength, shareholders should be happy with 8% EPS growth. And they mostly seem to be.
The share price is steady, like everything with the company, down 0.27% as of writing. This steadiness is not a recent phenomenon -- for eight of the past 10 years, the company's stock has stayed between 19.9 times and 24.1 times earnings (the financial crisis years of 2008 and 2009 being the exception). Compare this to Diageo
For investors looking for a steady family-controlled business with solid growth but few thrills, partnering with the Brown family is still the best game in town.
To see if "steady as she goes" is the story for the next decade as well, be sure to add Brown-Forman to My Watchlist using the links below.