Important points from Brown-Forman’s Q4 earnings report

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Jun 9, 2021
  • Brown-Forman reports better than expected revenue for fiscal Q4.
  • The U.S. firm's quarterly profit comes in lower than analysts' estimates.
  • Brown-Forman has recovered 10% from its year-to-date low in March.

Brown-Forman Corp (NYSE: BF.B) said on Wednesday its revenue in the fiscal fourth quarter beat Wall Street estimates. Profit, however, came in weaker compared to what analysts had predicted.

Q4 financial results

Brown-Forman said its net income in the quarter that concluded on 30th April printed at $120 million (£85 million) that translates to 25 cents per share. In the same quarter last year, its net income stood at a higher $128 million, or 27 cents per share.

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The owner of prominent brands like Jack Daniel’s generated $812 million of sales in the recent quarter that represent a 14% year over year growth. According to FactSet, experts had forecast the company to post $774 million of sales in Q4. Their estimate for per-share earnings was for 31 cents. Gross profit as a percentage of sales slipped from 63.9% to 61.3%.

Fiscal 2021 results

For the full financial year, Brown-Forman said its Jack Daniel’s brands reported a 3% annualised increase in sales. Tequila sales jumped 9% in the recently concluded year, while wine sales noted a 10% year over year increase.

The Louisville-based company’s vodka sales come in 18% higher than last year. American whiskey and bourbons sales jumped 3% and 19%, respectively. In separate news from the United States, Campbell Soup also published its quarterly earnings report on Wednesday.

Guidance for fiscal 2022

Commenting on expectations for fiscal 2022, CFO Jane Morreau said:

“We are optimistic as we look ahead, as we expect the operating environment to continue to improve. We remain confident in the collective strength of our markets and should benefit from the re-opening of the on-premise channel and increase in tourism. Additionally, our portfolio remains well-positioned to capitalise on the continuing spirits premiumisation trend. For fiscal 2022, we anticipate mid-single-digit growth in underlying net sales and operating income.”

Impact on the share price

Brown-Forman shares were reported about 0.5% up in after-hours trading on Wednesday. Including the price action, the stock is now exchanging hands at $75.19 per share. This compares to a year-to-date low of $68.41 per share in the first week of March.

Brown-Forman performed fairly upbeat in the stock market last year with an annual gain of close to 20%. At the time of writing, one of the largest American-owned companies in the spirits and wine business is valued at $35.11 billion and has a price to earnings ratio of 39.67.

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