The distributor of Jack Daniel's whiskey is seeing double. Double-digit growth, that is.
More than half of Brown-Forman's Jack Daniel sales arise domestically, but they have been lagging the company's global growth. In the third quarter it reported that Old No. 7 was growing in the low single digits in the U.S. Though that growth may be slower than Tennessee whiskey filtering through its charcoal mellowing process, Jack Daniel's is the single most important brand to Brown-Forman, and the company is taking the steps necessary to support it.
Advertising for Jack Daniels, along with Finlandia vodka and its raspberry-flavored liqueur Chambord, rose 11% in the quarter to $94 million.
Earnings for the quarter also rose 12% to $0.89 per share, once several one-time gains recorded in last year's Q3 were stripped out. On a GAAP basis, earnings fell by 8%, but the year-ago period included a benefit related to changes in an Australian distributorship joint venture and the sale of winery property. It also narrowed its guidance for the rest of the year to the upper end of the range it had forecast in the second quarter. Brown-Forman now expects its earnings outlook to come in between $3.20 and $3.30 per share for the full year.
It's always an unsteady balancing act as consumers switch allegiances from liquor to wine to beer. Right now the preference has been for the hard stuff. Perhaps it's the flavor. According to the Brewers Association, craft beers -- the stronger, more flavorful brews -- have seen volume sales grow nearly 12% in 2006 to more than 6 million barrels. But that's just a drop in the barrel: Anheuser-Busch
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