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Oct 31, 2022
Brown-Forman Q2 2023 Earnings Report
Brown-Forman reported double-digit net sales growth and raised its full-year outlook.
Key Takeaways
Brown-Forman Corporation reported a 10% increase in net sales to $1.1 billion for the second quarter of fiscal 2023. Operating income decreased by 2% to $313 million, and diluted earnings per share decreased by 4% to $0.47.
Delivered broad-based reported net sales growth across all geographic clusters and the Travel Retail channel.
Portfolio growth was led by Jack Daniel’s Tennessee Whiskey, Woodford Reserve, and Ready-to-Drinks.
Reported gross margin contracted 130 basis points driven by inflation, supply chain disruption costs, and foreign exchange.
Reported advertising expense increased 19%.
Forward Guidance
The company anticipates stronger growth in fiscal 2023 despite global macroeconomic and geopolitical uncertainties.
Positive Outlook
- Expect organic net sales growth in the high-single digit range.
- Expect reported gross margin to be consistent with the first half of fiscal 2023.
- Anticipate high-single digit organic operating income growth.
- Expect our fiscal 2023 effective tax rate to be in the range of approximately 22% to 23%.
- Capital expenditures are planned to be in the range of $190 to $210 million.
Challenges Ahead
- Global macroeconomic uncertainties
- Geopolitical uncertainties
- Higher inflation
- Supply chain disruption costs
- Negative effect of foreign exchange
Historical Earnings Impact
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Avg. Return Before/After Earnings
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