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Jan 31, 2020

Brown-Forman Q3 2020 Earnings Report

Brown-Forman's third quarter results were reported, with net sales remaining flat and diluted earnings per share increasing.

Key Takeaways

Brown-Forman reported essentially flat net sales of $899 million (+3% on an underlying basis) for the third quarter. Operating income decreased 5% to $304 million (+5% on an underlying basis), while diluted earnings per share rose 2% to $0.48. The company revised its full-year outlook due to tempered expectations in some international markets and an increasingly uncertain global environment.

Net sales were essentially flat at $899 million (+3% on an underlying basis).

Operating income decreased 5% to $304 million (+5% on an underlying basis).

Diluted earnings per share rose 2% to $0.48.

Full-year outlook was revised to reflect tempered expectations in some international markets and an increasingly uncertain global environment, including the estimated impact of COVID-19.

Total Revenue
$899M
Previous year: $904M
-0.6%
EPS
$0.48
Previous year: $0.47
+2.1%
Gross Margin
61.9%
Previous year: 63.1%
-1.9%
Operating Margin
33.8%
Previous year: 35.3%
-4.2%
Effective Tax Rate
18.6%
Previous year: 20.3%
-8.4%
Gross Profit
$557M
Previous year: $571M
-2.5%
Cash and Equivalents
$276M
Previous year: $260M
+6.2%
Free Cash Flow
$286M
Previous year: $274M
+4.4%
Total Assets
$5.52B
Previous year: $5.16B
+6.9%

Brown-Forman

Brown-Forman

Forward Guidance

The company revised the full-year outlook to reflect tempered expectations in some of its international markets reflecting both short-term disruptions and an increasingly uncertain global economic and geopolitical environment. This outlook also includes an estimated impact of COVID-19 (coronavirus).

Positive Outlook

  • Low-single digit underlying net sales growth
  • Diluted earnings per share of $1.75 to $1.80

Challenges Ahead

  • Flat to modest decline in underlying operating income