Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

What You Need to Know About Brown-Forman's Earnings Release

By Nicole Seghetti - Mar 7, 2014 at 11:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of Brown-Forman are up following lip-smacking results. Here's what you need to know.

Spirits maker Brown-Forman ( BF.B -4.07% ) reported earnings on Wednesday. Here's what you need to know about the company's recent performance.

Results recap
Brown-Forman's fiscal third-quarter organic net sales grew 5% to $1.1 billion. Profits for the maker of Finlandia and Jack Daniel's jumped by 14% to $0.82 per share. Analysts expected sales of $1.1 billion and earnings of $0.76 a share. The alcoholic beverage maker also boosted its earnings outlook for next quarter, saying that it now expects to earn approximately $3 per share for its full fiscal year. Shares of the company were up immediately following the announcement. 

Whiskey and vodka spike sales growth
Net sales increased 7% year to date for the first nine months of fiscal 2014. Brown-Forman enjoyed solid growth in many of its key brands, including a 10% jump in Jack Daniel's trademark brand. Jack Daniel's innovative Tennessee Honey grew a lip-smacking double digits. The popular Jack Daniel's brand has attained a spot on the Interbrand Best Global Brands list every year since the list's 2000 inception and climbed 7% in brand value last year. Brown-Forman's superpremium whiskey brands also spiked growth. Underlying sales grew by 16%, including a mouthwatering 27% jump from Woodford Reserve. The company's Finlandia's vodka brands grew sales by 9%.

Recipe for future growth
The Louisville-based company is hinging its future success on the surging popularity of brown liquor and important emerging markets. Its Jack Daniel's enjoyed 32% growth in Latin America in 2012, and Finlandia is the No. 1 imported premium vodka brand in Russia. Vying for a piece of the growing flavored-brown-spirits market, Brown-Forman's Tennessee Honey grew net sales 99% globally last year. Yet that still represents just 7% of Jack Daniel's sales. This spring Brown-Forman will open a new whiskey barrel-making facility in order to meet growing demand for its Jack Daniel's, which the company produced more than 11 million cases of last year.

But the spirits maker's success won't come without a brawl from rivals, especially U.K.-based Diageo. Last year, the competitor upped its stake in India's United Spirits, giving it the leading position in the world's largest whiskey market. In fact, Diageo sells a mind-boggling six bottles of Johnnie Walker worldwide every second.

Foolish takeaway
Despite the competitive alcoholic-beverage landscape, Brown-Forman boasts plenty of attractive growth opportunities. The liquor maker's commitment to leverage its great brands and successfully increase its presence in emerging markets is reflected in the company's strong quarterly and year-to-date results. For the patient, long-term investor, Brown-Forman embraces a lot to be giddy about.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brown-Forman Corporation Stock Quote
Brown-Forman Corporation
BF.B
$70.46 (-4.07%) $-2.99

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
652%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/09/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.