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Brown-Forman Sales Up 4% in Fiscal Half

December 8, 2020

Brown-Forman’s sales rose 4% on an underlying basis to $1.74 billion in its fiscal first half, with operating income up 11% to $717 million for the same period. While the company is still dealing with the effects of the Covid-19 pandemic, president and CEO Lawson Whiting said that Brown-Forman was “pleased with our underlying top-line growth in the first half” and that Brown-Forman’s business accelerated in the second quarter despite the ongoing challenges. Overall, Brown-Forman reported underlying sales up 4%, with the U.S. and developed international markets outpacing the company’s global results at 9% and 10%, respectively. Unfortunately, Brown-Forman’s emerging markets dropped by 13%, somewhat offsetting the growth in its top markets.

In the U.S., the company’s stable of premium-and-above Bourbons posted solid gains with Old Forester up double-digits and Woodford Reserve’s strong performance only slightly offset by a decline in travel retail. Globally, that portfolio was up 22% with both Woodford Reserve and Old Forester up double-digits. Tequila was up 13% globally for the company, with el Jimador performing well in the U.S. Herradura, however, faced more challenging conditions, down 2%, as declines in Mexico offset growth in the U.S.

The Jack Daniel’s family (including spirits and RTDs) grew by 2%, driven by the success of Jack Daniel’s Apple, Honey, Gentleman Jack, and RTDs. Growth was hampered by declines in the core Jack Daniel’s Tennessee Whiskey, which has been negatively impacted by the widespread on-premise shutdowns in the U.S. and developed international markets.

Beyond sales, Brown-Forman reported that advertising expenses were down 23%, due to the on-premise shutdowns and cancellation of consumer events. Looking ahead, the company anticipates an increase in advertising and promotional spending in the second half.

“These results are a testament to the resilience of our people, the strength of our brands, and the agility that so many before us today have demonstrated over the company’s last 150 years. As the pandemic continues, our focus remains on prioritizing the safety of our employees, meeting the needs of our consumers and business partners, and pursuing our long-term strategy,” said Whiting.—Shane English

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