Brown-Forman boasts vigorous quarter

Jack Daniel's brand fuels 18 percent profit

Associated PressMarch 7, 2013 

LOUISVILLE — Brown-Forman's third-quarter profit rose 18 percent, mixing strong sales in the United States and abroad as the liquor producer reported another round of robust demand for its flagship Jack Daniel's brand and its higher-priced premium brands.

The Louisville-based company on Wednesday reported a 7 percent gain in net sales in the quarter, reflecting continued strong demand following recent price increases for many of its premium brands.

Brown-Forman had solid sales during the crucial holiday period, said Chief Financial Officer Don Berg. The company was pleased with consumer reaction to its price hikes, and it "is evaluating future price increases on a market-by-market basis," he said.

The company expects high single-digit net sales growth for the full fiscal year despite a fragile global economy.

Net sales for its lucrative Jack Daniel's brand rose 10 percent when excluding currency swings for the nine-month period.

Jack Daniel's Tennessee Honey was the pacesetter, nearly doubling its global net sales from last year, the company said.

Brown-Forman said the product has had double-digit sales growth in the United States, and it has expanded to select international markets such as the United Kingdom, a key overseas market where its sales have been strong. The honey-laced product is part of an industry trend toward infusing new flavors into spirits to attract customers.

Meanwhile, net sales for its super-premium brands rose 14 percent, adjusted for currency fluctuations, in the nine-month period, the company said. Those brands include Herradura, Woodford Reserve, Sonoma-Cutrer and Chambord liqueur.

Overall, the company reported net income of $157.6 million, or 73 cents per share, for the three months ended Jan. 31, up 18 percent from a year ago. Quarterly net sales rose to just more than $1 billion. Analysts surveyed by FactSet expected earnings of 70 cents on net sales of $979.5 million.

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