Brown-Forman reports 10 percent net income growth
During the first half of its fiscal year, net sales rose 9 percent for its lucrative Jack Daniel's brand when excluding currency swings. The upswing was the result of volume gains and price increases taken earlier in the year, the company said.
Jack Daniel's Tennessee Honey, which debuted last year, had global net sales growth exceeding 50 percent. The honey-laced product is part of an industrywide trend toward infusing new flavors into spirits to attract customers.
Berg said that Jack Daniel's "is early in realizing the potential upside from our innovation agenda."
Brown-Forman said net sales for its Finlandia vodka brands also grew 9 percent in the first six months of the fiscal year, adjusted for currency fluctuations. Overall six-month sales of the el Jimador tequila brand rose 6 percent.
Sales for the struggling Southern Comfort brand improved in the U.S. for the second straight quarter, with year-to-date net sales up 2 percent, the company said. But global results for the overall brand were down 5 percent for the first half, due to soft demand in the United Kingdom and Australia, key international markets.
"There is more work to do here to stabilize global sales, but we are encouraged by recent U.S. results and believe that we are on the right track to return this ... brand to growth mode," Berg said.
Brown-Forman launched a new TV advertising campaign for Southern Comfort earlier this year to try to rejuvenate sales. The company said it is expanding its new ad campaign to other key markets around the world.
First-half net sales of Korbel Champagne were up 13 percent, while Canadian Mist sales rose 4 percent.
Sales for its super-premium brands, including Woodford Reserve, Herradura and Chambord, rose 17 percent.
"Consumers are increasingly looking at our high-end brands as affordable luxuries worth the prices charged," Berg said.
Brown-Forman's Class B shares fell 36 cents, or about a half-percent, to $68.38 in late-morning trading.
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