Brown Forman Corporation (BF.B)

Shares of Brown Forman Corporation (BF.B) dropped by 10.38% from $60.23 to $53.98 in the trading on Wednesday, December 6, 2023. The reason why BF.B is down today is due to mixed second-quarter fiscal 2024 results.

• Earnings and Sales: In the second quarter of fiscal 2024, Brown-Forman reported earnings per share (EPS) of $0.50, meeting expectations and reflecting a 6% YoY increase. However, net sales of $1,107 million missed the Zacks Consensus Estimate of $1,156 million.
• Gross Profit: Gross profit increased by 9% YoY to ** $671 million**, with a gross margin expansion of 460 basis points to 60.6%, driven by price/mix improvements, reduced supply-chain disruption costs, and lower tariff-related expenses.
• Operating Expenses: Operating expenses rose, with selling, general, and administrative expenses up 7% YoY, and advertising expenses increasing by 16% due to new product launches and acquisitions.
• Outlook: The company lowered its fiscal 2024 outlook, with anticipated organic sales growth of 3-5% (down from 5-7%) and organic operating income growth of 4-6%. Operating income is expected to benefit from organic net sales growth and lower supply-chain-disruption costs but offset by input cost inflation pressures.

Brown-Forman shares dropped 3.98% after reporting Q1 2024 results below expectations, with earnings per share (EPS) of $0.48 and a 3% revenue increase to $1.04 billion. Increased costs and a 14% overall cost rise, including a 19% jump in advertising expenses, impacted the outcome. Whiskey sales fell 1%, attributed to distributor inventory decrease. The company maintained its full-year guidance of 5%-7% sales growth and 6%-8% operating income climb.

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