The Jack Daniel’s and Woodford Reserve producer was expected to report earnings of $691.2 million as a result of the Covid-19 pandemic. However, it beat expectations by reporting Q1 sales of $753 million, down from $766 million the previous year
Cost of sales increased by 7%, meaning that gross profit was down 7% for the quarter, but president and chief executive Lawson Whiting was “very pleased” with the robust results.
“Despite being faced with significant ongoing challenges, our business performed well during the quarter though much uncertainty remains in the current environment,” he said. “We believe we are well positioned to navigate the headwinds we face today and emerge from the COVID-19 environment in a stronger position.”
Underlying net sales increased 9% year-on-year in the United States, while reported sales were up 3%. Sales were up 12% in “developed international markets”, but sales in emerging markets fell 20%.
The core Jack Daniel’s brand saw declines, but growth in its RTDs, Apple and Honey variants and Gentleman Jack ensured that the Jack Daniel’s family of brands decreased just 2%.
The premium bourbons division, which includes Woodford Reserve and Old Forester, grew underlying net sales by 18%, while the firm’s tequila portfolio was up 16%, driven by el Jimador.
The company did not provide financial guidance given uncertainties related to the COVID-19 pandemic.
Brown-Forman’s share price increased significantly after it revealed its Q1 results. It opened $65.56 on the NYSE on Wednesday, and increased to $75.61, before closing at $71.97.
