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LOUISVILLE, Ky.–(BUSINESS WIRE)–Brown-Forman Corporation (NYSE: BFA, BFB) reported financial results for its second quarter and first half of fiscal 2024 ended October 31, 2023. Second quarter reported net sales increased 1%1 to $1.1 billion (-1% on an organic basis2) compared to the same prior-year period. In the quarter, reported operating income increased 8% to $339 million (+9% on an organic basis) and diluted earnings per share increased 6% to $0.50.
For the first six months of the fiscal year, the company’s reported net sales increased 2% to $2.1 billion (+1% on an organic basis) compared to the same prior-year period. First half reported operating income increased 1% to $666 million (+1% on an organic basis) and diluted earnings per share decreased 1% to $0.98.
Brown-Forman’s President and Chief Executive Officer Lawson Whiting stated, “Our first half fiscal 2024 results illustrate Brown-Forman’s ability to deliver continued growth, even amid dynamic market conditions and very strong comparisons from the prior-year period. While we grew at a slower pace than anticipated, we delivered strong gross margin expansion and continued to invest strongly behind our brands. We continue to believe our premium portfolio and broad geographic footprint will position us for accelerated growth in the second half of the fiscal year.”
First Half of Fiscal 2024 Highlights
First Half of Fiscal 2024 Brand Results
First Half of Fiscal 2024 Market Results
First Half of Fiscal 2024 Other P&L Items
Financial Stewardship
As announced on October 2, 2023, the Brown-Forman Board of Directors authorized the repurchase of up to $400 million (exclusive of brokerage fees and excise taxes) of outstanding shares of Class A and Class B common stock from October 2, 2023, through October 1, 2024, subject to market and other conditions. As of November 30, 2023, approximately $181 million remained available under the program.
On November 16, 2023, the Brown-Forman Board of Directors approved a 6% increase in the quarterly cash dividend to $0.2178 per share on its Class A and Class B common stock. The dividend is payable on January 2, 2024, to stockholders of record on December 1, 2023. Brown-Forman, a member of the prestigious S&P 500 Dividend Aristocrats Index, has paid regular quarterly cash dividends for 80 consecutive years and has increased the regular dividend for 40 consecutive years.
Fiscal 2024 Outlook
While we remain optimistic about our prospects for growth of organic net sales and organic operating income in fiscal 2024, evolving global macroeconomic conditions continue to create a challenging operating environment tempering our expectations. Accordingly, we now expect the following in fiscal 2024:
Conference Call Details
Brown-Forman will host a conference call to discuss these results at 10:00 a.m. (ET) today. A live audio broadcast of the conference call, and the accompanying presentation slides, will be available via Brown-Forman’s website, brown-forman.com, through a link to “Investors/Events & Presentations.” A digital audio recording of the conference call and the presentation slides will also be posted on the website and will be available for at least 30 days following the conference call.
For more than 150 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine quality beverage alcohol brands, including Jack Daniel’s Tennessee Whiskey, Jack Daniel’s Ready-to-Drinks, Jack Daniel’s Tennessee Honey, Jack Daniel’s Tennessee Fire, Jack Daniel’s Tennessee Apple, Gentleman Jack, Jack Daniel’s Single Barrel, Woodford Reserve, Old Forester, Coopers’ Craft, The GlenDronach, Benriach, Glenglassaugh, Slane, Herradura, el Jimador, New Mix, Korbel, Sonoma-Cutrer, Chambord, Fords Gin, Gin Mare, and Diplomático Rum. Brown-Forman’s brands are supported by approximately 5,600 employees globally and sold in more than 170 countries worldwide. For more information about the company, please visit brown-forman.com. Follow us on LinkedIn, Instagram, and X, formerly Twitter.
Important Information on Forward-Looking Statements:
This press release contains statements, estimates, and projections that are “forward-looking statements” as defined under U.S. federal securities laws. Words such as “aim,” “anticipate,” “aspire,” “believe,” “can,” “continue,” “could,” “envision,” “estimate,” “expect,” “expectation,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “pursue,” “see,” “seek,” “should,” “will,” “would,” and similar words indicate forward-looking statements, which speak only as of the date we make them. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. These risks and uncertainties include, but are not limited to:
For further information on these and other risks, please refer to our public filings, including the “Risk Factors” section of our annual report on Form 10-K and future quarterly reports on form 10-Q filed with the Securities and Exchange Commission.
Brown-Forman Corporation |
||||||||||
|
|
2022 |
|
|
|
2023 |
|
|
Change |
|
|
|
|
|
|
|
|||||
Net sales |
$ |
1,094 |
|
|
$ |
1,107 |
|
|
1 |
% |
Cost of sales |
|
481 |
|
|
|
436 |
|
|
(9 |
%) |
Gross profit |
|
613 |
|
|
|
671 |
|
|
9 |
% |
Advertising expenses |
|
121 |
|
|
|
140 |
|
|
16 |
% |
Selling, general, and administrative expenses |
|
180 |
|
|
|
192 |
|
|
7 |
% |
Other expense (income), net |
|
(1 |
) |
|
|
— |
|
|
|
|
Operating income |
|
313 |
|
|
|
339 |
|
|
8 |
% |
Non-operating postretirement expense |
|
— |
|
|
|
— |
|
|
|
|
Interest expense, net |
|
15 |
|
|
|
29 |
|
|
|
|
Income before income taxes |
|
298 |
|
|
|
310 |
|
|
4 |
% |
Income taxes |
|
71 |
|
|
|
68 |
|
|
|
|
Net income |
$ |
227 |
|
|
$ |
242 |
|
|
6 |
% |
|
|
|
|
|
|
|||||
Earnings per share: |
|
|
|
|
|
|||||
Basic |
$ |
0.47 |
|
|
$ |
0.50 |
|
|
6 |
% |
Diluted |
$ |
0.47 |
|
|
$ |
0.50 |
|
|
6 |
% |
|
|
|
|
|
|
|||||
Gross margin |
|
56.0 |
% |
|
|
60.6 |
% |
|
|
|
Operating margin |
|
28.7 |
% |
|
|
30.6 |
% |
|
|
|
|
|
|
|
|
|
|||||
Effective tax rate |
|
23.7 |
% |
|
|
22.0 |
% |
|
|
|
|
|
|
|
|
|
|||||
Cash dividends paid per common share |
$ |
0.1885 |
|
|
$ |
0.2055 |
|
|
|
|
|
|
|
|
|
|
|||||
Shares (in thousands) used in the calculation of earnings per share |
|
|
|
|
|
|||||
Basic |
|
479,138 |
|
|
|
479,200 |
|
|
|
|
Diluted |
|
480,549 |
|
|
|
480,115 |
|
|
|
Brown-Forman Corporation |
||||||||||
|
|
2022 |
|
|
|
2023 |
|
|
Change |
|
|
|
|
|
|
|
|||||
Net sales |
$ |
2,101 |
|
|
$ |
2,145 |
|
|
2 |
% |
Cost of sales |
|
866 |
|
|
|
823 |
|
|
(5 |
%) |
Gross profit |
|
1,235 |
|
|
|
1,322 |
|
|
7 |
% |
Advertising expenses |
|
231 |
|
|
|
271 |
|
|
17 |
% |
Selling, general, and administrative expenses |
|
355 |
|
|
|
392 |
|
|
10 |
% |
Other expense (income), net |
|
(7 |
) |
|
|
(7 |
) |
|
|
|
Operating income |
|
656 |
|
|
|
666 |
|
|
1 |
% |
Non-operating postretirement expense |
|
— |
|
|
|
1 |
|
|
|
|
Interest expense, net |
|
32 |
|
|
|
56 |
|
|
|
|
Income before income taxes |
|
624 |
|
|
|
609 |
|
|
(2 |
)% |
Income taxes |
|
148 |
|
|
|
136 |
|
|
|
|
Net income |
$ |
476 |
|
|
$ |
473 |
|
|
(1 |
)% |
|
|
|
|
|
|
|||||
Earnings per share: |
|
|
|
|
|
|||||
Basic |
$ |
0.99 |
|
|
$ |
0.99 |
|
|
(1 |
)% |
Diluted |
$ |
0.99 |
|
|
$ |
0.98 |
|
|
(1 |
)% |
|
|
|
|
|
|
|||||
Gross margin |
|
58.8 |
% |
|
|
61.6 |
% |
|
|
|
Operating margin |
|
31.2 |
% |
|
|
31.0 |
% |
|
|
|
|
|
|
|
|
|
|||||
Effective tax rate |
|
23.7 |
% |
|
|
22.4 |
% |
|
|
|
|
|
|
|
|
|
|||||
Cash dividends paid per common share |
$ |
0.3770 |
|
|
$ |
0.4110 |
|
|
|
|
|
|
|
|
|
|
|||||
Shares (in thousands) used in the calculation of earnings per share |
|
|
|
|
|
|||||
Basic |
|
479,106 |
|
|
|
479,262 |
|
|
|
|
Diluted |
|
480,494 |
|
|
|
480,234 |
|
|
|
Brown-Forman Corporation |
|||||||
|
April 30, 2023 |
|
October 31, 2023 |
||||
Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
374 |
|
$ |
373 |
||
Accounts receivable, net |
|
855 |
|
|
948 |
||
Inventories |
|
2,283 |
|
|
2,585 |
||
Assets held for sale |
|
— |
|
|
117 |
||
Other current assets |
|
289 |
|
|
250 |
||
Total current assets |
|
3,801 |
|
|
4,273 |
||
|
|
|
|
||||
Property, plant, and equipment, net |
|
1,031 |
|
|
1,060 |
||
Goodwill |
|
1,457 |
|
|
1,461 |
||
Other intangible assets |
|
1,164 |
|
|
989 |
||
Other assets |
|
324 |
|
|
332 |
||
Total assets |
$ |
7,777 |
|
$ |
8,115 |
||
|
|
|
|
||||
Liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
827 |
|
$ |
794 |
||
Accrued income taxes |
|
22 |
|
|
36 |
||
Short-term borrowings |
|
235 |
|
|
456 |
||
Liabilities held for sale |
|
— |
|
|
11 |
||
Total current liabilities |
|
1,084 |
|
|
1,297 |
||
|
|
|
|
||||
Long-term debt |
|
2,678 |
|
|
2,654 |
||
Deferred income taxes |
|
323 |
|
|
299 |
||
Accrued postretirement benefits |
|
171 |
|
|
171 |
||
Other liabilities |
|
253 |
|
|
240 |
||
Total liabilities |
|
4,509 |
|
|
4,661 |
||
|
|
|
|
||||
Stockholders’ equity |
|
3,268 |
|
|
3,454 |
||
|
|
|
|
||||
Total liabilities and stockholders’ equity |
$ |
7,777 |
|
$ |
8,115 |
Brown-Forman Corporation |
|||||||
|
|
2022 |
|
|
|
2023 |
|
|
|
|
|
||||
Cash provided by operating activities |
$ |
316 |
|
|
$ |
97 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Additions to property, plant, and equipment |
|
(61 |
) |
|
|
(79 |
) |
Other |
|
3 |
|
|
|
18 |
|
Cash provided by (used for) investing activities |
|
(58 |
) |
|
|
(61 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Net change in other short-term borrowings |
|
186 |
|
|
|
220 |
|
Acquisition of treasury stock |
|
— |
|
|
|
(42 |
) |
Dividends paid |
|
(180 |
) |
|
|
(197 |
) |
Other |
|
(5 |
) |
|
|
(4 |
) |
Cash provided by (used for) financing activities |
|
1 |
|
|
|
(23 |
) |
|
|
|
|
||||
Effect of exchange rate changes |
|
(37 |
) |
|
|
(7 |
) |
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
222 |
|
|
|
6 |
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at beginning of period |
|
874 |
|
|
|
384 |
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash at end of period |
|
1,096 |
|
|
|
390 |
|
Less: Restricted cash at end of period |
|
(9 |
) |
|
|
(10 |
) |
Less: Cash included in assets held for sale at end of period |
|
— |
|
|
|
(7 |
) |
Cash and cash equivalents at end of period |
$ |
1,087 |
|
|
$ |
373 |
|
Schedule A |
|||||
Brown-Forman Corporation |
|||||
Supplemental Statement of Operations Information (Unaudited) |
|||||
|
|
|
|
||
Percentage change versus the prior-year period ended |
October 31, 2023 |
||||
3 Months |
|
6 Months |
|||
Reported change in net sales |
1 |
% |
|
2 |
% |
Acquisitions and divestitures |
(1 |
%) |
|
(2 |
%) |
Foreign exchange |
(1 |
%) |
|
— |
% |
Organic change in net sales2 |
(1 |
%) |
|
1 |
% |
|
|
|
|
||
Reported change in gross profit |
9 |
% |
|
7 |
% |
Acquisitions and divestitures |
(2 |
%) |
|
(1 |
%) |
Foreign exchange |
1 |
% |
|
1 |
% |
Organic change in gross profit2 |
9 |
% |
|
7 |
% |
|
|
|
|
||
Reported change in advertising expenses |
16 |
% |
|
17 |
% |
Acquisitions and divestitures |
(5 |
%) |
|
(5 |
%) |
Foreign exchange |
(1 |
%) |
|
(1 |
%) |
Organic change in advertising expenses2 |
10 |
% |
|
12 |
% |
|
|
|
|
||
Reported change in SG&A |
7 |
% |
|
10 |
% |
Acquisitions and divestitures |
— |
% |
|
— |
% |
Foreign exchange |
(1 |
%) |
|
(1 |
%) |
Organic change in SG&A2 |
6 |
% |
|
9 |
% |
|
|
|
|
||
Reported change in operating income |
8 |
% |
|
1 |
% |
Acquisitions and divestitures |
(1 |
%) |
|
(1 |
%) |
Foreign exchange |
2 |
% |
|
1 |
% |
Organic change in operating income2 |
9 |
% |
|
1 |
% |
______________________ |
|||||
See “Note 2 – Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. |
|||||
Note: Totals may differ due to rounding. |
Schedule B |
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Brown-Forman Corporation |
|||||||||||||||||||
Supplemental Statement of Operations Information (Unaudited) |
|||||||||||||||||||
Six Months Ended October 31, 2023 |
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Supplemental Information3 |
|
|
|
|
|
|
|
|||||||||||
|
Volumes (9-Liter Cases) |
|
Net Sales % Change vs. 2022 |
||||||||||||||||
Product Category / Brand Family / Brand3 |
Depletions (Millions) |
% Change vs. Prior-Year Period |
Shipments (Millions) |
% Change vs. Prior-Year Period |
|
Reported |
Acquisitions and Divestitures |
Foreign Exchange |
|
|
Organic2 |
||||||||
Whiskey |
10.8 |
(1 |
%) |
10.7 |
(7 |
%) |
|
(2 |
%) |
— |
% |
1 |
% |
|
|
(1 |
%) |
||
JDTW |
7.3 |
(2 |
%) |
7.2 |
(9 |
%) |
|
(4 |
%) |
— |
% |
1 |
% |
|
|
(2 |
%) |
||
JDTH |
1.0 |
(5 |
%) |
1.0 |
(9 |
%) |
|
(7 |
%) |
— |
% |
— |
% |
|
|
(8 |
%) |
||
Gentleman Jack |
0.4 |
2 |
% |
0.4 |
(9 |
%) |
|
(7 |
%) |
— |
% |
2 |
% |
|
|
(5 |
%) |
||
JDTF |
0.3 |
(2 |
%) |
0.3 |
(8 |
%) |
|
(11 |
%) |
— |
% |
— |
% |
|
|
(10 |
%) |
||
JDTA |
0.5 |
30 |
% |
0.5 |
36 |
% |
|
51 |
% |
— |
% |
1 |
% |
|
|
52 |
% |
||
Woodford Reserve |
0.8 |
6 |
% |
0.8 |
(6 |
%) |
|
(3 |
%) |
— |
% |
— |
% |
|
|
(3 |
%) |
||
Old Forester |
0.2 |
10 |
% |
0.2 |
(7 |
%) |
|
(5 |
%) |
— |
% |
— |
% |
|
|
(5 |
%) |
||
Rest of Whiskey |
0.3 |
(5 |
%) |
0.3 |
(3 |
%) |
|
22 |
% |
— |
% |
— |
% |
|
|
22 |
% |
||
Ready-to-Drink |
10.6 |
(1 |
%) |
11.7 |
(7 |
%) |
|
9 |
% |
— |
% |
(5 |
%) |
|
|
4 |
% |
||
JD RTD/RTP |
5.8 |
(5 |
%) |
6.8 |
(14 |
%) |
|
2 |
% |
— |
% |
(1 |
%) |
|
|
1 |
% |
||
New Mix |
4.8 |
4 |
% |
4.8 |
4 |
% |
|
41 |
% |
— |
% |
(19 |
%) |
|
|
22 |
% |
||
Tequila |
1.2 |
(8 |
%) |
1.2 |
(8 |
%) |
|
2 |
% |
— |
% |
(3 |
%) |
|
|
(1 |
%) |
||
Herradura |
0.3 |
(1 |
%) |
0.3 |
(8 |
%) |
|
(5 |
%) |
— |
% |
(4 |
%) |
|
|
(9 |
%) |
||
el Jimador |
0.8 |
(9 |
%) |
0.8 |
(7 |
%) |
|
8 |
% |
— |
% |
(1 |
%) |
|
|
7 |
% |
||
Wine |
0.8 |
(4 |
%) |
1.1 |
5 |
% |
|
5 |
% |
— |
% |
— |
% |
|
|
5 |
% |
||
Vodka |
1.2 |
(5 |
%) |
1.2 |
(7 |
%) |
|
4 |
% |
— |
% |
— |
% |
|
|
3 |
% |
||
Rest of Portfolio |
0.3 |
2 |
% |
0.3 |
(1 |
%) |
|
104 |
% |
(92 |
%) |
5 |
% |
|
|
17 |
% |
||
Non-branded & bulk |
NM |
NM |
|
NM |
NM |
|
|
(3 |
%) |
— |
% |
1 |
% |
|
|
(2 |
%) |
||
Total Portfolio |
25.0 |
(2 |
%) |
26.2 |
(7 |
%) |
|
2 |
% |
(2 |
%) |
— |
% |
|
|
1 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Brand Aggregations |
|
|
|
|
|
|
|
|
|
|
|||||||||
Jack Daniel’s Family of Brands |
15.5 |
(3 |
%) |
16.4 |
(10 |
%) |
|
(1 |
%) |
— |
% |
1 |
% |
|
|
— |
% |
||
American Whiskey |
10.7 |
(1 |
%) |
10.6 |
(7 |
%) |
|
(2 |
%) |
— |
% |
1 |
% |
|
|
(1 |
%) |
||
Premium Bourbons |
1.1 |
7 |
% |
1.1 |
(6 |
%) |
|
(4 |
%) |
— |
% |
— |
% |
|
|
(4 |
%) |
||
______________________ |
|||||||||||||||||||
See “Note 2 – Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. |
|||||||||||||||||||
Note: Totals may differ due to rounding. |
Schedule C |
||||||||||
Brown-Forman Corporation |
||||||||||
Supplemental Statement of Operations Information (Unaudited) |
||||||||||
Six Months Ended October 31, 2023 |
||||||||||
|
|
|
|
|
|
|
||||
|
Net Sales % Change vs. Prior-Year Period |
|||||||||
Geographic Area3 |
Reported |
Acquisitions and Divestitures |
Foreign Exchange |
|
|
Organic2 |
||||
United States |
(4 |
%) |
(1 |
%) |
— |
% |
|
|
(5 |
%) |
Developed International |
3 |
% |
(4 |
%) |
(2 |
%) |
|
|
(2 |
%) |
Germany |
10 |
% |
(1 |
%) |
(3 |
%) |
|
|
5 |
% |
Australia |
(4 |
%) |
— |
% |
1 |
% |
|
|
(4 |
%) |
United Kingdom |
(5 |
%) |
(1 |
%) |
(3 |
%) |
|
|
(9 |
%) |
France |
1 |
% |
(1 |
%) |
(3 |
%) |
|
|
(3 |
%) |
Canada |
— |
% |
(1 |
%) |
1 |
% |
|
|
— |
% |
Japan |
(79 |
%) |
— |
% |
(4 |
%) |
|
|
(84 |
%) |
Rest of Developed International |
23 |
% |
(12 |
%) |
(3 |
%) |
|
|
8 |
% |
Emerging |
17 |
% |
(1 |
%) |
2 |
% |
|
|
19 |
% |
Mexico |
30 |
% |
— |
% |
(18 |
%) |
|
|
12 |
% |
Poland |
26 |
% |
(1 |
%) |
(5 |
%) |
|
|
20 |
% |
Brazil |
11 |
% |
— |
% |
(2 |
%) |
|
|
9 |
% |
Rest of Emerging |
10 |
% |
(1 |
%) |
17 |
% |
|
|
25 |
% |
Travel Retail |
3 |
% |
(2 |
%) |
(1 |
%) |
|
|
— |
% |
Non-branded and bulk |
(3 |
%) |
— |
% |
1 |
% |
|
|
(2 |
%) |
Total |
2 |
% |
(2 |
%) |
— |
% |
|
|
1 |
% |
______________________ |
||||||||||
See “Note 2 – Non-GAAP Financial Measures” for details on our use of Non-GAAP financial measures, how these measures are calculated, and the reasons why we believe this information is useful to readers. |
||||||||||
Note: Totals may differ due to rounding. |
Contacts
Rob Frederick
Vice President
Corporate Communications
rob_frederick@b-f.com
502-774-7707
Sue Perram
Vice President
Investor Relations
sue_perram@b-f.com
502-774-6862
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