LOUISVILLE — Liquor company Brown-Forman Corp. said Thursday its first-quarter profit fell 7 percent, taking a shot to its earnings when problems with a key raw material in its tequila production caused a $22 million pretax charge. It also lowered its annual earnings projection as a result of the charge.
The Louisville-based owner of the Jack Daniel's brand reported a mixed performance for its leading brands in the latest quarter.
Its shares fell $2.85, or 3.7 percent, to $74.17 in trading Thursday.
For the three months ended July 31, earnings totaled $88.2 million, or 73 cents per share, compared with $95.3 million, or 77 cents a share, in the year-ago period.
Net sales rose 7 percent to $790 million from $739.1 million a year ago.
The hefty charge — stemming from an abnormally high rate of dead or dying agave plants, the main raw material in the company's tequila production — resulted in a 13-cent-per-share charge for the quarter.
Brown-Forman lowered its earnings-per-share projection for the current full year to $3.60 to $3.85 per share.
Don Berg, the company's chief financial officer, said the company determined during the recent quarter that about one-fourth of its agave supply in Mexico was unusable.
Despite the problem, Brown-Forman executives outlined ambitious plans to expand distribution of the company's Herradura and el Jimador tequila brands, which the company purchased in early 2007. Brown-Forman's tequila brands also include Don Eduardo and Pepe Lopez.