LOUISVILLE — Liquor producer Brown-Forman's second-quarter net income rose 10 percent as a revenue spike from recent price increases for many of its premium brands helped sluggish sales.
Buoyed by strong international demand and improving U.S. sales in the first half of its fiscal year, the company also on Wednesday raised its full-year earnings outlook to a range of $2.58 to $2.70 per share, up from its prior forecast of $2.40 to $2.67 per share.
Despite quarterly earnings on the upswing, the maker of Jack Daniel's whiskey said its net sales growth in the quarter was hampered by distributors and retailers stocking up in advance of the price increases for many of its products.
"Our brands continue to deliver strong and balanced underlying growth in an uncertain global environment," Brown-Forman CEO Paul Varga said. "We are pleased with the balance in both geographic and portfolio mix."
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Brown-Forman said its net sales growth also was affected by the sale of its Hopland, Calif.-based wine business last year.
The company sounded upbeat about improvements in its U.S. business during the first half of its fiscal year.
It noted an "improving environment for spirits," with consumers trading up to drink more premium, and pricier, brands.
Sales at U.S. bars and restaurants — known in the industry as "on premise" consumption — was hit hard by the economic downturn and has struggled to regain momentum during the sluggish recovery.
The company said its first-half sales growth was driven by continued expansion into emerging markets, with strong sales in Russia, Brazil, Turkey, Mexico and Poland.
The Louisville-based company reported net income of $173 million, or 80 cents, per share, for the three months ended Oct. 31. That's up from $157.6 million, or 73 cents per share, a year ago. Net sales were flat at just more than $1 billion.
Analysts surveyed by FactSet expected earnings of 78 cents per share on revenue of $946.7 million.
During the first half of its fiscal year, net sales rose 9 percent for its flagship Jack Daniel's brand when excluding currency swings. The upswing was the result of volume gains and price increases taken earlier in the year, the company said.
Jack Daniel's Tennessee Honey, which debuted last year, had global net sales growth exceeding 50 percent. The honey-laced product is part of an industrywide trend toward infusing new flavors into spirits to attract customers.
Sales for the struggling Southern Comfort brand improved in the United States for the second straight quarter, with year-to-date net sales up 2 percent, the company said. But global results for the overall brand were down 5 percent for the first half, due to soft demand in the United Kingdom and Australia, key international markets.
Brown-Forman launched a new TV advertising campaign for Southern Comfort earlier this year to try to rejuvenate sales. The company said it is expanding its new ad campaign to other key markets around the world.
Sales for its super-premium brands, including Woodford Reserve, Herradura and Chambord, rose 17 percent in the six-month period.