Brown-Forman's stock slides 11% as earnings lag estimates for Jack Daniel's parent
By Ciara Linnane
Company says slowing consumer spending has it tempering expectations for fiscal 2024
Brown-Forman Corp.'s stock tumbled 11% on Wednesday after the parent to Jack Daniel's whiskey posted weaker-than-expected fiscal second-quarter earnings and said a challenging operating environment has it tempering its expectations for the year.
The stock (BF.B) was leading S&P 500 decliners and was on track for its biggest one-day percentage decline since March 20, 2020, when it fell 13.6%, according to Dow Jones Market Data.
In the year to date, the stock has fallen 18.7%, to put it on track for its worst year since 1999, when it fell 24.3%. The S&P 500 SPX has gained 19% in the year to date.
On a call with analysts, Chief Executive Lawson Whiting sought to allay investor concerns.
"Fundamentally, our brands remain in very strong shape,' he said, according to a FactSet transcript. "However, over the last couple of months, we have seen a slowdown in consumer spending similar to the trends we're seeing across total distilled spirits and other consumer packaged goods."
See also: Constellation Brands swings back to profit but guidance leaves analysts unimpressed
The company had net income of $242 million, or 50 cents a share, for the quarter to Oct. 31, up from $227 million, or 47 cents a share, in the year-earlier period. Sales rose 1% to $1.107 billion. The FactSet consensus was for earnings per share of 51 cents and sales of $1.149 billion.
"While we grew at a slower pace than anticipated, we delivered strong gross margin expansion and continued to invest strongly behind our brands," Whiting said in a statement.
The company now expects full-year organic sales growth of 3% to 5%, down from guidance of 5% to 7% offered with first-quarter earnings. Organic sales strip out the impact of foreign exchange and acquisitions.
"While we remain optimistic about our prospects for growth of organic net sales and organic operating income in fiscal 2024, evolving global macroeconomic conditions continue to create a challenging operating environment tempering our expectations," the statement said.
.
-Ciara Linnane
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
12-06-23 1138ET
Copyright (c) 2023 Dow Jones & Company, Inc.-
Six Sports Betting and iGaming Stocks Trading at a Discount
-
4 Predictions for Stocks and the Economy for the Second Half of 2024
-
What Broadening Rally? AI Stocks Dominate Again In Q2
-
After Earnings, Is Nike Stock a Buy, a Sell, or Fairly Valued?
-
Worst-Performing Stock ETFs of the Quarter
-
Top-Performing Stock ETFs of the Quarter
-
Q2 In Review and Q3 2024 Market Outlook
-
5 Stocks to Buy for 3Q 2024
-
Industrials: Sector Offers Investment Opportunities as Performance Lags Broader Market
-
Consumer Defensives: Even Amid Macro Pressures, Deals Permeate the Landscape
-
33 Undervalued Stocks
-
Utilities: Can the Stocks Keep the Rally Going?
-
Basic Materials: Following Index Decline, We See Many Long-Term Opportunities
-
Healthcare: Valuations Look Attractive In Most Industries
-
Financial Services: Amid Uncertainties, We See the Most Value In Banks and Credit Services
-
Consumer Cyclicals: Even With Anxiety Over Spending, We See Attractive Valuations