News Briefs for August 29, 2018August 29, 2018
•Brown-Forman reported a net sales increase of 6% to $766 million (+9% on an underlying basis) for its fiscal first quarter ended July 31, 2018. Operating income rose by 7% to $264 million (+10% underlying), and diluted earnings per share grew 12% to $0.41. Consumer demand for American whiskey brands remained robust, keeping top-line growth in line for a 6%-7% rise for the full year. But the company lowered its full-year profit outlook, citing a competitive global landscape and recently enacted retaliatory tariffs on American whiskey. The earnings per share (EPS) forecast was cut to $1.65-$1.75, from a previous $1.75-$1.85. Full-year operating profit is projected at 4%-6%. In the U.S.market, underlying net sales grew 2%, compared to 5% last year. Growth was led by the Jack Daniel’s family but also included strong double-digit performances from Woodford Reserve, Old Forester, Herradura and el Jimador Tequila. Total global net sales showed a 9% rise (+6% reported). Growth in global markets outside the U.S. were up 16% (+12% reported).
•Yesterday, United States Second Circuit Court of Appeals affirmed the dismissal of Empire Merchants’ lawsuit against Breakthru Beverage’s Maryland subsidiary Reliable Churchill by a U.S. District Court. Empire’s lawsuit, which was filed in 2016, alleged that Reliable Churchill conspired with retailers to illegally ship alcohol from Maryland to New York, depriving Empire of as much as $100 million in sales. The lawsuit was dismissed in March 2017 by U.S. District judge Allyne Ross. In a separate decision, another federal court ordered Empire to pay Reliable Churchill’s legal fees. “We’re pleased that the Court of Appeals has affirmed the District Court’s decision dismissing Empire’s claims against Breakthru, and are glad to put this matter behind us,” a Breakthru spokesperson said.
•Napa Valley winemaker Cakebread Cellars has appointed Mike Jaeger as president and CEO, effective October 1. Jaeger comes to Cakebread with decades of experience in marketing, sales, and operations, with over 20 years in the wine industry. Most recently, Jaeger has served as CEO of C. Mondavi & Family as well as chairman of Clos du Val Winery. Cakebread Cellars’ current president Bruce Cakebread will retain a role on the company’s board of directors, following his retirement. Bruce and his brother Dennis also will serve as Cakebread brand ambassadors after Jaeger’s transition to his new position.
•St. Helena, California wine-and-food producer Long Meadow Ranch Wine Estates (LMR) has acquired a majority stake in the McCrea family’s Stony Hill Vineyard for an undisclosed sum. The sale includes the Stony Hill brand and inventory, as well as 35 acres of vineyards. As part of the deal, the McCrea family will retain an equity interest in the newly combined operation, and the Stony Hill team will come under LMR’s umbrella, with company president Sara McCrea set to join LMR’s executive team, and her father, Peter, staying on as part of the advisory board. LMR—which is led by Napa’s Ted and Chris Hall—has estates throughout Mayacamas, Rutherford, and Anderson Valley. Wine Spectator has more on the deal between these two family-owned Napa wineries.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.