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Brown-Forman: ‘strong’ H1 despite supply chain issues

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Jack Daniel’s proprietor Brown-Forman delivered a 9% enhance in internet gross sales within the first half of fiscal 2022, with a lift from premium Bourbon and Tequila.

Brown-Forman's Jack Daniel's whiskey portfolio
Brown-Forman reported a ‘sturdy’ first half of fiscal 2022

Through the first six months of its fiscal yr, the Kentucky-based spirits agency posted internet gross sales of US$1.9 billion, leaping by 9% in comparison with the identical interval final yr.

Its second quarter internet gross sales grew by a modest 1% following a robust begin to the yr, with first quarter net sales up by 20%.

“Regardless of the numerous challenges and ongoing uncertainties created by the pandemic, Brown-Forman’s enterprise stays extremely sturdy,” stated Lawson Whiting, Brown-Forman’s president and chief govt officer.

The corporate’s outcomes had been led by double-digit progress in its premium Bourbons and its Tequila portfolio.

The previous class noticed internet gross sales climb by 11%, led by the Woodford Reserve and Outdated Forester manufacturers. ‘Sturdy volumetric features’ and the return of journey retail aided premium Bourbon’s efficiency.

Tequila registered a 16% enhance in internet gross sales, pushed by Herradura and El Jimador.

Herradura posted elevated quantity gross sales within the US and Mexico, and El Jimador noticed an increase in volumes within the US, Mexico and the UK – although these features had been partially offset by a drop in volumes for the Tequila-based RTD New Combine, which final yr skilled a bounce in gross sales attributable to provide chain points within the beer trade.

Brown-Forman’s Jack Daniel’s portfolio grew internet gross sales by 9% within the first half of fiscal 2022, registering increased volumes internationally and benefiting from the reopening of the on-trade.

Volumes grew for each Jack Daniel’s RTDs and for the model’s Tennessee Honey spirit drink, and the continuing rollout of its Tennessee Apple product contributed to the momentum, as effectively.

In the meantime, journey retail gross sales climbed by 38% attributable to a beneficial comparability with final yr’s pandemic-impacted figures.

“We’re happy with the sturdy first half of the fiscal yr and stay assured in our capability to ship sustainable long-term progress, notably given shoppers’ growing choice for premium spirits and our power within the rising American whiskey and Tequila classes,” commented Whiting.  

Provide chain points

Disruptions in Brown-Forman’s provide chains impacted the enterprise’ efficiency in a number of markets, together with the US, the place internet gross sales had been flat.

The corporate noticed progress of 26% in rising markets, although these had been additionally affected by provide chain points.

‘At the moment, we’re managing by way of the affect of global supply chain disruptions, together with glass provide, and have deployed numerous danger mitigation methods to handle the varied constraints on our enterprise,’ Brown-Forman reported.

‘Whereas we anticipate provide chain disruptions to persist all through the fiscal yr, we consider the affect will turn out to be much less important within the second half of the yr.’

The agency stated it’s ‘assured’ in its future efficiency, and has thus revised its full-year underlying internet gross sales outlook from mid-single-digit to high-single-digit progress.

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