Are you planning a Thanksgiving feast, or are you taking your Hartmann Luggage to someone else's house to celebrate? To hosts and hostesses, Brown-Forman
Although tableware, giftware, and Hartmann Luggage are all Brown-Forman products, it is adult beverage names such as Korbel California Champagnes, Fetzer and Bolla wines, Jack Daniel's, Southern Comfort, Finlandia Vodka, and Canadian Mist that are most familiar to consumers -- and the beverages of choice for holiday season toasts.
The second-quarter news for shareholders is worthy of celebration. Net sales increased 8% and net income shot up 16% for the latest quarter. While consumer durables revenue fell 9%, those adult beverages -- led by a strong performance by Jack Daniel's -- increased a lucky 13%.
A lower dollar has helped results, and that trend is still continuing.
Although wine profits fell and there will be some inventory reductions in the fourth quarter, because of new international distribution agreements, the company estimates it will earn $2.38 to $2.43 a share in 2005.
Investors might balk at paying almost 20 times forward earnings for a company expected to grow earnings by about 10% a year -- especially when diversified competitors such as Diageo
Brown-Forman has also avoided the temptation to pay high prices in the consolidating wine industry. While Constellation Brands
As tastes change, Brown-Forman has an adult beverage to suit. This quarter it was Jack Daniel's that grew strongly. Last quarter, it was Jack and Southern Comfort. Whatever brand comes to the rescue, Brown-Forman has shown a knack to make money quarter after quarter.
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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.