LOUISVILLE — Liquor company Brown-Forman posted a 30 percent increase in its third-quarter profit Tuesday on the strength of robust international sales and a sales spike for its Jack Daniel's and el Jimador brands.
The Louisville-based company also raised its full-year earnings outlook and reported improving results in the United States, where the economic downturn has made consumers less inclined to venture out to drink at bars and restaurants.
The maker of Jack Daniel's Tennessee Whiskey and Southern Comfort has focused attention on boosting sales overseas. Sales gains in the first nine months of its fiscal year were led by strong performances in such places as Australia, the United Kingdom, Mexico, Turkey, Germany, France and Brazil.
"We continue to be pleased with our broad-based growth encompassing both developed and emerging international markets," Brown-Forman CEO Paul Varga said in a statement.
International sales account for 56 percent of the company's total net sales.
Looking at the U.S. market, Chief Financial Officer Don Berg said the overall spirits business appears to be improving. He said consumers are showing more willingness to spend on higher-priced spirits, but said out-on-the-town drinking has been "somewhat erratic" on a monthly basis but appears to have been flat over the past 12 months.
In a note to investors, UBS analyst Kaumil S. Gajrawala was upbeat about the prospects for the spirits industry and Brown-Forman.
"We believe U.S. spirit trends should improve ... throughout the year, with the return to trading up, continued share gain versus beer and a reduction in promotional activity year-over-year," he wrote. "Brown-Forman is well positioned and branded to take advantage of these industry trends."
The company reported net income of $140.7 million, or 96 cents per share, in the three months ending Jan. 31, up from $107.9 million, or 73 cents per share, a year earlier. Net revenue rose 12 percent to $962.4 million from $861.7 million a year ago.
The company raised its full-year earnings outlook to a range of $3.35 to $3.45 per share, up from its previous projected range of $3.18 to $3.42 per share.
Its Jack Daniel's lineup of brands had a 9 percent gain in net sales for the first nine months of the fiscal year. The Jack Daniel's ready-to-drink products posted a 22 percent gain, based on a constant currency basis.
The company's el Jimador tequila brand posted a 15 percent gain in net sales for the nine months, also on a constant currency basis. The entire el Jimador lineup had a 13 percent gain.
Its Finlandia vodka brand posted a 1 percent gain in net sales for the nine months on the same basis, while Southern Comfort had a 1 percent decline. Net sales for Canadian Mist were off 6 percent, Korbel Champagne sales were flat, and a lineup of super-premium brands including Chambord, Sonoma-Cutrer and Woodford Reserve had a 12 percent gain.
Brown-Forman said it plans to revamp its marketing strategy for Southern Comfort. The company also is planning new packaging for Finlandia in the next several months.