LOUISVILLE — Liquor producer Brown-Forman announced Wednesday that its fiscal third-quarter profit fell 5 percent, as distributors bought less inventory after stocking up in anticipation of price increases.
Company executives said those price increases have started on a limited basis but will spread later this year as the maker of Jack Daniel's whiskey looks to offset rising costs for grain, glass and fuel.
The company, whose spirits lineup includes Southern Comfort and Finlandia vodka, said a stronger U.S. dollar was another drag on profit in the three months ending Jan. 31. More than half of Brown-Forman's overall sales come from markets outside the United States.
The company narrowed its full-year earnings forecast. Brown-Forman said it expects earnings of $3.50 to $3.65 per share. It previously expected earnings per share of $3.45 to $3.70. Analysts expect $3.56 per share.
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The Louisville-based company reported net income of $133.1 million, or 93 cents per share, in the third quarter. That's down from $140.7 million, or 96 cents per share, a year ago. Revenue slipped to $959 million from $962.4 million a year ago.
Analysts polled by FactSet expected earnings of $1.01 per share on revenue of $947.6 million.
Distributor inventories were a key factor behind the lower third-quarter profit. Distributors stockpiled inventories last year while bracing for anticipated price increases.
"While we don't anticipate a lot of pricing improvement for the rest of this fiscal year, we are optimistic about the potential opportunity in fiscal 2013," Chief Financial Officer Don Berg told analysts as the company looks for broader price increases.
Brown-Forman said its flagship Jack Daniel's whiskey brand led sales gains for the first nine months of its fiscal year. Sales rose 12 percent for the overall Jack Daniel's brand when excluding the impact of currency changes.
Jack Daniel's Tennessee Honey, which debuted last year, has been the key to rising sales for the Jack Daniel's brand in the United States, said company CEO Paul Varga. The company said it plans to expand the honey-flavored whiskey to several overseas markets in the next year, including the United Kingdom, South Africa and Australia, building on international sales momentum for the Jack Daniel's brand.