Beam Inc., parent company of Jim Beam and Maker's Mark bourbons, reported increased sales, particularly of its top brands, on Thursday.
For the second quarter of 2013, net income was $74.6 million, or 46 cents per share, compared with $101.9 million, or 63 cents a share, for the same quarter in 2012.
The quarterly earnings for 2013 were lowered by a one-time early payment of bond debt through refinancing that will result in better interest rates, according to the Deerfield, Ill.-based company.
Excluding that, earnings were 64 cents, up 8 percent from 2012's 59 cents; that is 4 cents better than Wall Street expectations, pushing the share price up during the day. Beam also announced that its board has authorized repurchase of as many as 3 million shares.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
For the first six months, net income was $189.0 million, with earnings of $1.16 per share, up 5 percent, compared to $1.11 in 2012.
Excluding the charges and gains, earnings were $1.27, up 15 percent from $1.10 in 2012.
Beam president and CEO Matt Shattock said the company expects to produce earnings growth in the high single digits for the year even though the stronger dollar is likely to cut into earnings by an estimated 5 cents a share.
"Beam delivered strong second-quarter results as five of our seven power brands produced double-digit sales growth," Shattock said in a news release. "Our strategy to create famous brands paid off in strong demand for our flagship Jim Beam brand, which grew double digits across the U.S. and Europe as premium innovations such as Jim Beam Honey and Devil's Cut added to growth for the core Jim Beam white label."
Net sales were up 7 percent for the quarter, based on strong global performance for bourbon. Sales of Jim Beam were up 4 percent, and Maker's Mark was up 18 percent, according to company figures. Premium labels also were up: Knob Creek rose 16 percent, and Basil Hayden was up 34 percent.
There were some hiccups: Sales of Skinnygirl — the line of ready-to-drink cocktails Beam bought from the brand's creator, reality TV star Bethenny Frankel, in 2011 — fell 23 percent, exacerbated by unseasonable weather, Shattock said. To re-energize the brand, Beam plans to release more new products, and the company expects a boost when Frankel's new talk show debuts next month.
Beam also saw growth in its share of the tequila and vodka markets, with Sauza sales up 5 percent, Hornitos up 12 percent and Pinnacle up 13 percent.
But the action, Shattock said, is in bourbon. To capitalize on it, Beam officials said they plan to implement selective price increases in premium whiskeys and bourbon, including Maker's Mark.
"Bourbon remains the fastest-growing large category in the U.S., and demand for America's native spirit continues to grow rapidly around the world with plenty of headroom for growth in the global whiskey category," Shattock told investors and stock analysts in a conference call Thursday.
"Jim Beam is the No. 1 bourbon in more than 100 countries, Maker's Mark is the iconic leader in its segment. We pioneered small-batch bourbon, and we've led on flavor innovation. This unparalleled breadth of portfolio enables us to cover all price points and occasions and accelerate that growth up the price ladder."
Beam mandates that 25 percent of long-term sales growth come from new products, and Shattock said the company is on track to achieve that again this year.
"We're especially pleased with the momentum Jim Beam Honey is building in all major bourbon markets and the halo effect this seems to be having on the core Jim Beam brand as well," Shattock said.
Globally, the market is expected to grow 3 percent for the remaining six months, he said.