Brown-Forman bottled a quarterly sales gain of 17% on strong "consumer demand for the company's premium global brands" and a recent acquisition of Casa Herradura and its high-end tequila brands. A weaker U.S. dollar also helped boost revenue as Jack Daniel's experienced mid-single-digit depletion growth, an industry-wide measure of "shipments from wholesale distributors to retail customers."
Reported earnings advanced only 1%, though by the company's estimates, "underlying earnings" grew 10% after stripping out tequila purchase dilution, a penny gain related to last year's sale of the Lenox crystal business, and a couple of other adjustments it deemed one-time in nature. It should get better as the year progresses, and management expects full-year earnings growth of 7%-13%.
Based on current projections, Brown-Forman's stock trades at more than 21 times earnings, placing it at a premium to archrival Diageo
Overall, premium alcohol brands have been experiencing higher growth and profitability trends as consumers shift away from beer made by the likes of Anheuser-Busch
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Anheuser-Busch is a recommendation of Motley Fool Inside Value. Diageo is a recommendation of Motley Fool Income Investor. Whatever your taste preference, The Motley Fool has brewed up an investing service to quench your stock thirst.
Fool contributor Ryan Fuhrmann is long shares of Diageo but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.
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