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NEW YORK - Brown-Forman Corporation (NYSE:BFA, BFB) reported third-quarter earnings that surpassed analyst expectations, sending shares up 3.4% in premarket trading.
The spirits maker posted adjusted earnings per share of $0.57, beating the consensus estimate of $0.47, despite a 3% YoY decline in reported net sales to $1.0 billion.
The company’s organic net sales grew 6% in the quarter, demonstrating resilience in a challenging market environment. Brown-Forman reaffirmed its full-year outlook, projecting organic net sales and operating income growth of 2% to 4% for fiscal 2025.
"We are pleased to reaffirm our outlook for organic top and bottom line growth in fiscal 2025 and are proud of our team’s ability to deliver industry-leading growth in this challenging environment," said Lawson Whiting, Brown-Forman’s President and Chief Executive Officer.
For the nine months ended January 31, 2025, reported net sales decreased 4% to $3.1 billion, while organic net sales grew 2%. The company’s year-to-date diluted earnings per share fell 4% to $1.53.
Brown-Forman’s Whiskey portfolio showed signs of improvement, with flat reported net sales but 2% organic growth. The Tequila portfolio faced challenges, with net sales declining 15% (-13% organic) due to competitive pressures in the U.S. and macroeconomic headwinds in Mexico.
The company’s gross margin contracted 150 basis points to 59.4%, primarily due to higher costs and foreign exchange impacts, partially offset by favorable price/mix. Brown-Forman also recognized a $78 million gain on the sale of its investment in The Duckhorn Portfolio, Inc., contributing $0.14 to diluted earnings per share.
Despite ongoing market uncertainties, Brown-Forman maintained its quarterly dividend of $0.2265 per share, marking its 81st consecutive year of regular quarterly cash dividends and 41st consecutive year of dividend increases.
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