In This Article:
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Reported Net Sales: Decreased 4% in the nine months of fiscal 2025.
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Organic Net Sales: Grew 2% after adjusting for divestitures and other factors.
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Woodford Reserve Organic Net Sales Growth: Increased 10%, driven by higher volumes and positive price mix.
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Jack Daniel's Tennessee Whiskey Organic Net Sales Growth: Increased 2% for the year-to-date period.
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New Mix Organic Net Sales Growth: Achieved double-digit growth in 12 of the past 13 quarters.
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Diplomatico Organic Net Sales Growth: Delivered strong double-digit growth, led by France and Czechia.
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Gin Mare Organic Net Sales Growth: Increased double digits, driven by Germany, Spain, and travel retail.
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Gross Margin: Contracted by 150 basis points to 59.4%.
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Operating Expenses: Lower due to a 6% decrease in organic advertising expense and a 4% decrease in organic SG&A investment.
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Reported Operating Income: Decreased 13% in the nine months of fiscal 2025.
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Organic Operating Income Growth: Increased 5% in the nine months of fiscal 2025.
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Diluted Earnings Per Share: Decreased 4% to $1.53.
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Expected Annualized Savings from Workforce Reduction and Cooperage Closure: Approximately $70 million to $80 million.
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Proceeds from Cooperage Asset Sale: Expected to be more than $30 million.
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Cash Received from Duckhorn Portfolio Sale: $350 million, with a $78 million gain recognized.
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Capital Expenditures Outlook: Estimated to be in the range of $180 million to $190 million.
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Effective Tax Rate Outlook: Updated to approximately 20% to 22%.
Release Date: March 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Brown-Forman Corp (NYSE:BF.A) reported sequentially stronger top and bottom-line results as they entered the second half of fiscal 2025.
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Organic net sales grew 2% after adjusting for divestitures, with Woodford Reserve and Jack Daniel's Tennessee Whiskey being major contributors.
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The company reaffirmed its full-year organic net sales and organic operating income outlook for fiscal 2025.
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Emerging international markets delivered an 8% organic net sales increase, led by strong growth in Turkey and Brazil.
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Brown-Forman Corp (NYSE:BF.A) is executing strategic initiatives, including restructuring and workforce reduction, expected to deliver $70 million to $80 million in annualized savings.
Negative Points
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Reported net sales decreased by 4% in the nine months of fiscal 2025.
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The operating environment remains dynamic with uncertainties, particularly concerning tariffs.
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Tequila brands, Jimador and Herradura, continue to face challenges in the US and Mexico.
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Higher costs and the negative impact of foreign exchange led to a 150 basis points gross margin contraction.
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The US spirits market is experiencing flat to declining trends, with consumer spending being more mindful due to inflationary pressures.