Jack Daniel's maker Brown-Forman Corp. said Wednesday that its third-quarter profit rose 5 percent, led by strong demand for its pricier American whiskeys and broad sales growth in the U.S. and overseas.
The company also behind the Southern Comfort and Finlandia brands said accelerating growth in U.S. and favorable fourth-quarter comparisons keep it on track to reach its full-year outlook for underlying sales.
Brown-Forman CFO Jane Morreau said the company's market share gains in the U.S. are driven by stronger consumer interest in its American whiskey lineup, led by Jack Daniel's, Woodford Reserve and Old Forester.
"Premiumization trends and innovation have played key roles in driving our outperformance over the last few years and we look to introduce new expressions, over time, that we believe can help us deliver sustainable long-term growth," Morreau said.
The Louisville, Kentucky-based company reported net income of $186 million, or 87 cents per share, for the third quarter ended Jan. 31. A year ago, net income was $177 million, or 82 cents per share. The results met Wall Street expectations, according to the consensus of seven analysts surveyed by Zacks Investment Research.
The company posted net sales of $1.1 billion for the just-ended quarter, up 1 percent from a year ago.
For the first nine months of the fiscal year, net sales for the entire Jack Daniel's brand increased 8 percent, excluding currency swings, the company said. Underlying sales for Jack Daniel's Tennessee Honey jumped by 32 percent, driven by expansion into new markets and growth in established markets, it said.
The company's underlying net sales in the U.S. grew by 7 percent in the nine months, fueled by demand for its flagship Jack Daniel's products, it said.
Those same net sales rose by 6 percent during the period in emerging markets, led by double-digit growth in Turkey, Brazil, Indonesia, Ukraine and sub-Saharan Africa.
Underlying net sales growth was 4 percent in developed markets outside the U.S., it said. Strong-performing markets included the United Kingdom, France and Canada, while Germany and Italy delivered more modest gains. Australia's results were down slightly due to weak economic conditions and competitive pressures.
Performance was mixed among Brown-Forman's other leading spirits brands. Net sales for Finlandia vodka products fell 9 percent when excluding currency swings for the nine months, the company said. Net sales for the Southern Comfort brand dropped by 5 percent in the period.
Sales for Herradura grew by 19 percent on the same underlying basis, led by big gains in the U.S. and Mexico, while sales for the el Jimador tequila lineup rose by 4 percent.
The Woodford Reserve bourbon brand posted 32 percent growth in underlying net sales, while Old Forester bourbon had double-digit net sales growth.
Brown-Forman expects full-year earnings to be $3.15 to $3.25 per share. Analysts surveyed by FactSet expected $3.23 per share.
Its shares slipped 16 cents to $90.05 in midday trading Wednesday.