LOUISVILLE, Ky. (AP) — Liquor producer Brown-Forman Corp.'s second-quarter net income rose 10 percent as a revenue spike from recent price increases for many of its premium brands helped offset slower sales due to prior stocking up by distributors and retailers.
Buoyed by strong international demand and improving U.S. sales in the first half of its fiscal year, the company also on Wednesday raised its full-year earnings outlook to a range of $2.58 to $2.70 per share, up from its prior forecast of $2.40 to $2.67 per share.
"At this stage, we expect the momentum of the first half to continue, with the price increases we have taken driving improved price mix and leverage the gross profit line," Brown-Forman Chief Financial Officer Don Berg said in a conference call with Wall Street analysts.
Despite quarterly earnings on the upswing, the maker of Jack Daniel's whiskey said its net sales growth in the second quarter was hampered by distributors and retailers stocking up in advance of the price increases for many of its products.
Brown-Forman said its net sales growth also was affected by the sale of its Hopland, Calif.-based wine business last year.
The company, however, sounded upbeat about improvements in its U.S. business during the first half of its fiscal year.
It noted an "improving environment for spirits," with consumers trading up to drink more expensive brands.
Sales at U.S. bars and restaurants were hit hard by the economic downturn and has struggled to regain momentum during the sluggish recovery.
The company also pointed to progress in spreading sales growth beyond its flagship Jack Daniel's brand.
In the first half of the fiscal year, Brown-Forman brands excluding Jack Daniel's achieved underlying sales growth of about 6 percent, about twice the growth pace of a year ago, Berg said.
The company said emerging markets also drove its first-half sales growth, with strong sales in such countries as Russia, Brazil, Turkey, Mexico and Poland. International markets account for more than half the company's sales.
Louisville-based Brown-Forman reported net income of $173 million, or 80 cents, per share, for the three months ended Oct. 31. That's up from $157.6 million, or 73 cents per share, a year ago. Net sales were flat at just over $1 billion.