Q4 was a mixed bag for Brown Forman. The company reported that their earnings exceeded expectations, but their sales figures fell short of goals. Adhering to a recent industry theme, the spirits conglomerate cited tariffs as the major obstacle to growth over the last year.
Net sales in Q4 increased 1% compared to the same period last year to $744 million according to an investor call. Shareholders were happy to learn that reported operating income jumped 55% to $228 million and diluted earnings per share grew 47% to $0.33.
“Although tariffs and higher input costs will negatively impact our gross margins again this year, we believe we are on track to return to high single digit operating income growth as we move beyond fiscal 2020,” said BF President & CEO Lawson Whitein a statement. “Our growth prospects remain bright as we develop our premium spirits portfolio around the world, led by the Jack Daniel’s family of brands and Woodford Reserve.”
Despite a major hit in Europe due to the tariffs, American whiskey led the charge for BF. The flagship Jack Daniel’s family of brands netted a 4% uptick in sales. BF’s premium range followed the banner of Woodford Reserve and Old Forester to clock 23% increase in net sales.
El Jimador and Herradura both delivered strong 13% increases in net sales. Unfortunately, looming tariffs on Mexican goods is expected to spark a sharp dip in US tequila sales figures.
BF’s final major spirit holding, Finalndia Vodka reported a 1% drop in net sales.