Brown-Forman Corp. Faces Setback in Q2 Earnings
Brown-Forman Corp., the parent company of Jack Daniel's whiskey, experienced a 4.7% drop in its stock early Wednesday following weaker-than-expected fiscal second-quarter earnings. The company reported net income of $242 million, or 50 cents a share, for the quarter ending October 31, compared to $227 million, or 47 cents a share, in the same period last year. Despite sales rising 1% to $1.107 billion, this fell short of the FactSet consensus of EPS of 51 cents and sales of $1.149 billion.
Shifting Expectations in a Challenging Operating Environment
Chief Executive Lawson Whiting stated in a press release that although the company achieved strong gross margin expansion and continued to invest in its brands, it fell short of its anticipated growth rate. As a result, Brown-Forman Corp. now forecasts a lower full-year organic sales growth of 3% to 5%, down from the previous guidance of 5% to 7% provided during the first-quarter earnings. Organic sales exclude any impact from foreign exchange and acquisitions.
Uncertain Economic Conditions Impact Outlook
While remaining optimistic about future growth in organic net sales and organic operating income for fiscal 2024, the company acknowledged the challenging global macroeconomic conditions affecting its expectations. The stock of Brown-Forman Corp. has declined by 8.3% year-to-date, in contrast to the S&P 500's gain of 19%.
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