Brown-Forman Net Surged 36% in Year
Brown-Forman Corp. reports net income surged 36% to $207 million, or 43 cents a share as net sales for fiscal 2023, ended April 30, rose 8% to $4.2 billion(10% organic).
Positive portfolio sales growth occurred across all geographic clusters and Travel Retail. Woodford Reserve sales were up 29% (27% organic), Jack Daniel's Tennessee Whiskey net sales growth of 3% (8% organic), Jack Daniel's Ready to Drink/Ready to Pour net sales were up 11% (+16%), fueled by the launch of Jack Daniel's & Coca-Cola RTD in the U.S.
The Jack Daniel’s family of brands’ 3 reported net sales growth of 4% (+9% organic) was led by Jack Daniel’s Tennessee Whiskey in international markets and the Travel Retail channel. Higher pricing and an estimated net increase in distributor inventories in certain emerging and developed international markets positively impacted reported net sales.
Jack Daniel’s RTD/RTP grew reported
net sales 11% (+16% organic) driven by the introduction of the Jack Daniel’s & Coca-Cola RTD. In
addition, reported net sales also benefited from innovation with the launch of Jack Daniel’s Bonded
Tennessee Whiskey.
• Premium bourbons, propelled by strong double-digit net sales growth from Woodford Reserve and
Old Forester, delivered 23% reported net sales growth (+24% organic) driven by stronger consumer
demand in the United States. Gains for Woodford Reserve were partially due to the estimated net
increase in distributor inventories, while Old Forester’s growth was driven by higher volumes and
pricing.
Ready-to-Drinks (RTDs) growth continued to be driven by consumer preference for convenience and
flavor. New Mix gained market share in Mexico as reported net sales grew 53% (+45% organic),
fueled by higher volumes and prices.
Reported net sales for the tequila portfolio increased 10% (+10% organic) with el Jimador and
Herradura both delivering double-digit reported net sales growth. el Jimador grew reported net sales
13% (+14% organic) with broad-based growth across all geographic clusters, led by the Emerging
markets and the United States.
Herradura increased reported net sales 11% (+10% organic) driven by higher prices and volumes in Mexico and volumetric growth in the United States, partially due to an estimated net increase in distributor inventories.
Emerging markets represented 18% of net sales for fiscal 2023, Brown-Forman said. Sales in the U.S. rose about 3%, developed international markets sales rose about 4% and Travel Retail reported a 41% sales increase.
Looking to fiscal 2024, Brown-Forman said it was "optimistic about our prospects for growth of organic net sales and organic operating income in fiscal 2024. We believe trends will normalize after two consecutive years of double-digit organic net sales growth. Accordingly, we expect the following in fiscal 2024:
• Reflecting the strength of our portfolio of brands, our pricing strategy, and strong consumer demand, we expect organic net sales growth in the 5% to 7% range.
• Based on the above organic net sales growth outlook, and our expectation that continued input cost pressures will be partially offset by lower supply chain disruption costs, we anticipate organic operating income growth in the 6% to 8% range.
• We expect our fiscal 2024 effective tax rate to be in the range of approximately 21% to 23%.
• Capital expenditures are planned to be in the range of $250 to $270 million.