Brown-Forman Q2 Earnings Miss Estimates

  • Brown-Forman Corp (NYSE: BF-A) reported second-quarter FY22 sales growth of 1% year-on-year, to $994 million, missing the analyst consensus of $1.05 billion. EPS of $0.49 missed the analyst consensus of $0.52.
  • The gross margin expanded 30 basis points Y/Y to 59.3%. The operating margin contracted 120 basis points to 32.3%, and operating income for the quarter fell 2% to $322 million.
  • The company held $1.1 billion in cash and equivalents as of October 31, 2021. Cash provided by operating activities totaled $335 million with a free cash flow of $302 million.
  • Brown-Forman's special dividend of $480 million, or $1.00 per share, on its Class A and Class B common stock is payable on December 29, 2021, to stockholders of record on December 9, 2021.
  • Outlook: Brown-Forman revised the FY22 underlying net sales outlook from mid-single digit to high-single-digit growth.
  • It continues to expect the gross margin to be flat or slightly down for the full year.
  • Brown-Forman continues to anticipate that its quarterly results will be volatile for the remainder of FY22.
  • The company anticipates volatility and uncertainty to persist in the operating environment due to COVID-19 and supply chain disruptions.
  • Price Action: BF-A shares are trading lower by 4.51% at $65.41 on the last check Wednesday.
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