Jack Daniel’s owner Brown-Forman reported a 1% drop in sales during the first half of fiscal 2021 as struggling vodka sales offset increases for Tequila and American whiskey.
Brown-Forman posted sales of US$1.74 billion for the six months to 31 October, 1% lower than the same period last year. Operating income for the period increased 19% to US$717m.
In the second quarter, net sales were valued at $985m, which Brown-Forman said was “essentially flat” compared with the same period last year. Operating income decreased by 6% to US$330m during Q2.
Across its portfolio, Brown-Forman witnessed a 2% net sales increase for the Jack Daniel’s family of brands and a 22% increase in sales of its premium Bourbon portfolio, driven by sustained double-digit growth from Woodford Reserve and Old Forester.
The company’s Tequila portfolio grew underlying sales by 13%, led by strong volume-driven increases from New Mix in Mexico and El Jimador in the US. Herradura’s underlying sales declined 2% as lower volumes in Mexico offset double-digit growth in the US.
However, Brown-Forman’s vodka sales for the six-month period dropped 20% on an underlying basis.
Across its global markets, Brown-Forman reported net sales increased by 3% in the US, boosted by demand for premium Bourbons and Tequila. These gains were partially offset by declines in Jack Daniel’s Tennessee Whiskey, said to reflect “an unfavourable channel mix” as a result of restrictions placed in the on-trade due to Covid-19.
Across its developed international markets, Brown-Forman witnessed 10% reported sales growth, fuelled by Jack Daniel’s RTDs, Jack Daniel’s Tennessee Honey, Gentleman Jack and the launch of Jack Daniel’s Tennessee Apple in a number of countries.
The company’s emerging markets reported a 13% drop during H1 as a result of the impact of the pandemic in places such as Southeast Asia, Russia, India and Latin America.
Brown-Forman said travel retail continues “to be significantly impacted by the continuation of travel bans and restrictions”.
Lawson Whiting, Brown-Forman president and chief executive officer, said: “We continue to be pleased with our underlying top-line growth in the first half. Notably, our business accelerated in the second quarter amidst an unprecedented environment.
“These results are a testament to the resilience of our people, the strength of our brands, and the agility that so many before us today have demonstrated over the company’s last 150 years.
“As the pandemic continues, our focus remains on prioritising the safety of our employees, meeting the needs of our consumers and business partners, and pursuing our long-term strategy.”
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Author: Owen Bellwood