Brown-Forman announces +8% net sales for FY23

Brown-Forman has reported a net sales increase of 8% to $4.2bn for the fiscal year ended April 30, 2023, with a fourth quarter performance of +5% to $1bn.

Reported operating income decreased 6% to $1.1 billion in fiscal 2023 reflecting lower gross margin, higher non-cash impairment charges (largely related to the Finlandia brand), and higher operating expenses, including post-closing expenses of the acquisitions of Diplomático and Gin Mare.

Lawson Whiting, Brown-Forman’s president and CEO said: “In fiscal 2023, 
Brown-Forman continued its tradition of delivering strong organic top and bottom line growth. We were able to build on last year's double-digit organic net sales growth by continuing the premiumisation of our portfolio, investing boldly in our brands, building new strategic relationships, developing and supporting our talented people, and honouring our values.”

Fiscal 2023 Brand Results

  • The Jack Daniel’s family of brands’ reported net sales growth of 4% was led by Jack Daniel’s Tennessee Whiskey in international markets and the travel retail channel. Higher pricing and an estimated net increase in distributor inventories in certain emerging and developed international markets positively impacted reported net sales. Jack Daniel’s RTD grew reported net sales 11% driven by the introduction of the Jack Daniel’s & Coca-Cola RTD.
  • Strong double-digit net sales growth from Woodford Reserve and Old Forester contributed to a 23% reported net sales growth of premium bourbons driven by stronger consumer demand in the US.
  • Reported net sales for the tequila portfolio increased 10% with el Jimador and Herradura both delivering double-digit reported net sales growth. El Jimador grew reported net sales 13% with broad-based growth across all geographic clusters, led by the emerging markets and the US.

Fiscal 2024 Outlook

The company’s financial report stated: “We are optimistic about our prospects for growth of organic net sales and organic operating income in fiscal 2024. We believe trends will normalise after two consecutive years of double-digit organic net sales growth. Accordingly, we expect the following in fiscal 2024.

  • Reflecting the strength of our portfolio of brands, our pricing strategy, and strong consumer demand, we expect organic net sales growth in the 5% to 7% range.
  • Based on the above organic net sales growth outlook, and our expectation that continued input cost pressures will be partially offset by lower supply chain disruption costs, we anticipate organic operating income growth in the 6% to 8% range.
  • We expect our fiscal 2024 effective tax rate to be in the range of approximately 21% to 23%.
  • Capital expenditures are planned to be in the range of $250 to $270 million.”