Brown-Forman Earnings Boosted by Jack Daniel's Sales

Jack Daniel's (search) whiskey packed a strong kick for sales at Brown-Forman Corp. (BF.A), which Wednesday reported a 7 percent gain in fourth-quarter profit and a 21 percent upswing for the year amid strong demand for its premium spirits.

The Louisville-based liquor company also said favorable foreign-exchange rates and lower expenses offset weaker revenue as its consumer durables segment struggled.

Brown-Forman posted earnings of $60.7 million, or 49 cents per share, for the three months ended April 30, compared with $56.8 million or 46 cents per share, in the year-ago period.

Sales totaled $612.8 million for the quarter, down 2 percent from $625 million a year ago as the consumer segment posted lower revenue. Besides spirits, Brown-Forman also makes Hartmann luggage and tableware under the Lenox, Dansk and Gorham names.

The results matched Wall Street's consensus forecast of 49 cents per share, but missed analyst revenue expectations of $658.8 million, according to a survey by Thomson Financial.

"Our financial performance in the beverage segment was exceptional for the year," Brown-Forman Chairman and Chief Executive Owsley Brown II said in a conference call with industry analysts. "We remain optimistic about the global environment for premium spirits."

Leading the way was its flagship Jack Daniel's brand, which posted record worldwide sales growth of more than 680,000 cases to nearly 7.9 million during the past year.

Jack Daniel's posted its 13th straight year of volume growth, and last year's global sales rose by over 9 percent, its best rate in more than two decades.

For the full fiscal year, Brown-Forman posted earnings of $308.3 million, or $2.52 per share, up from $254 million or $2.08 a share for the previous year. Full-year sales rose 6 percent to $2.73 billion. Analysts expected full-year earnings of $2.46 per share on $2.76 billion in revenue.

Looking ahead, Brown-Forman forecast fiscal 2006 earnings between $2.70 and $2.80 per share. Wall Street's current average full-year forecast is $2.71, according to Thomson Financial.

"We're justifiably pleased of Jack Daniel's long history of steady growth, and are even more proud of its recent robust performance," Brown said.

Global sales for another premium brand, Southern Comfort (search), rose by 5 percent, or more than 100,000 cases to 2.28 million cases -- the brand's fastest growth in 15 years.

Finlandia Vodka global sales grew by 7 percent for the year to 1.8 million cases. Brown-Forman assumed sole ownership of Finlandia late last year by acquiring the remaining 20 percent share in the brand held by Altia Corp., a Finnish wine and spirits company.

Meanwhile, Brown-Forman is part of a consortium mulling an offer for U.K.-based Allied Domecq PLC, which has already agreed to a buyout offer from its smaller French rival, Pernod Ricard SA.

Brown-Forman has teamed with Constellation Brands Inc., the world's biggest winemaker, and private equity firms Lion Capital and Blackstone to consider an offer. The consortium faces a June 29 deadline from Britain's mergers and takeover watchdog to make an offer.

Brown-Forman executives offered no hints about whether an offer was forthcoming.

"There is no certainty that this will lead to an offer, or that any offer made would be successful," Brown said in the conference call Wednesday.

Also, Brown-Forman is reviewing options for Lenox, which makes up the bulk of its consumer durables business. Those options include selling Lenox or retaining the operation, which makes china, crystal and collectibles. A decision could come this summer, the company said.

Brown-Forman shares fell 21 cents to $58.81 on the New York Stock Exchange.