Jack Daniel's Parent Brown-Forman Tempers FY24 Expectations Amid Challenging Macro; Stock Tanks

Zinger Key Points
  • Brown-Forman EPS of $0.6 beat the consensus estimate of $0.58.
  • Brown-Forman expects FY24 organic sales to be flat.

Brown-Forman Corp BF BF reported a third-quarter FY24 sales decline of 1.1% year-on-year to $1.07 billion, missing the analyst consensus estimate of $1.12 billion.

EPS of $0.60 beat the analyst consensus estimate of $0.57.

The gross margin expanded 170 basis points Y/Y to 59.4%. The operating margin expanded 1,900 basis points to 34.9%, and operating income for the quarter increased 116% to $373 million.

The company held $589 million in cash and equivalents as of January 31, 2024. Cash provided by operating activities for nine months totaled $362 million.

“In a year with significant uncertainty and complexity in the spirits industry, Brown-Forman has demonstrated continued resilience and agility following two years of double-digit organic net sales growth,” said President and CEO Lawson Whiting.

Outlook: Brown-Forman tempered its expectations, noting that the operating environment continues to be challenging. 

The company expects FY24 organic sales to be flat (prior view: organic net sales growth in the 3% to 5% range).

The company anticipates FY24 capital expenditure of $230 million-$240 million (previous view: $250 million-$270 million).

Price Action: BF-A shares are trading lower by 9.87% at $55.07 on the last check Wednesday.

Image by Lumen Photos via Shutterstock

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