Brown-Forman falls as the Jack Daniel's maker misses estimates

Brown-Forman Corporation (NYSE:BF.B) fell 4.7% on Wednesday morning as results missed estimates.

The outlook for fiscal 2024, which BF.B reaffirmed, includes organic net sales growth in the 5% to 7% range and cost pressures partially offset by lower supply chain disruption costs. The average analyst estimate shows an expectation for sales growth of 6.76%.

The company forecasts organic operating income growth in the 6% to 8% range with capital expenditures of $250M to $270M.

For the fiscal first quarter, the Jack Daniel's maker reported GAAP EPS of $0.48 compared to the estimate of $0.53. Revenue of $1.04B missed the expectation by $10M.

“Our first quarter growth was impacted by the difficult shipment comparison from fiscal 2023, when we rebuilt inventory impacted by prior glass supply challenges,” Chief Executive Officer Lawson Whiting said in a statement.

Ready-to-drink sales jumped 52% while whiskey sales declined 1% led by Woodford Reserve and Gentleman Jack. The tequila portfolio increased 15%.

JPMorgan, which has a Neutral rating on the stock, said to expect “modestly negative” stock reaction after BF.B shares outperformed of late.

“Most of the EPS miss was driven by operating expense spend (timing of investment behind Jack & Coke launch) and the gross margin performance was solid and there could be some more upside to go as cost headwinds in prior year are lapped and abating costs begin to flow through, notably agave,” analysts led by Andrea Teixeira wrote in a note.

“It seems well understood that full-strength spirits category dynamics are normalizing, and on the earnings call.”

Shares are down 11% over the past 12 months.