U.S.-based spirits firm Brown-Forman Corp said that sales for its full-year results ended April 30, 2018 grew by 8% to $3.2bn. The fourth quarter alone saw growth of 6% to $733m.
The firm best known for its whiskey and bourbon brands, Jack Daniel’s and old Forester said that the recent U.S. tax reform in the third quarter and the creation of a $70m charitable foundation in the fourth quarter had an adverse impact on 2018 earnings. It also notes that the phasing of expenses in the fourth quarter negatively impacted results, while full year net sales benefited by one percentage point from foreign exchange and one percentage point from estimated net changes in distributor inventories.
Operating Income for the full year grew by 5% to $1.04bn.
Paul Varga, the company’s Chief Executive Officer said, “Brown-Forman delivered excellent results in fiscal 2018, driven by underlying net sales growth of 6.5%, which more than doubled fiscal 2017’s rate of growth. Our results demonstrated an excellent balance across both geography and portfolio, while being driven once again by the Jack Daniel’s trademark and our premium American whiskey portfolio.
The firm said that it delivered a strong and broad-based growth around the world, with balanced contribution from the main geographic clusters including the United States, developed markets outside the U.S., and emerging markets.
The United States which accounted for 47% of the company’s sales grew 7%, helped by broad-based gains from its Jack Daniel’s family of brands. The company’s super-premium American whiskey portfolio continued to perform well with double-digit underlying net sales gains from Woodford Reserve and Old Forester.
Developed markets outside of the United States posted solid gains, with Germany and the United Kingdom both reporting 14% and 4% growth respectively.
Emerging markets continued to strengthen despite increasing difficult comparisons. Mexico grew sales 15%, fueled by strong growth in tequila portfolio and the Jack Daniel’s family of brands, Poland, Russia and Brazil all reported strong growths of 15%, 52% and 34% respectively as the markets experienced improved economic conditions as well as reduced currency volatility.
Looking forward to 2019, the company notes that the global economy has improved over the last year, however, the competitive landscape in the developed world remains intense, not to mention concerns over retaliatory tariffs on American spirits. However, if current trends continue, it expects 6% to 7% underlying net sales growth.