NYSE$BF-A

Brown Forman Corporation · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Brown-Forman reported double-digit net sales growth and raised its full-year outlook.

Brown-Forman Corporation reported a 10% increase in net sales to $1.1 billion for the second quarter of fiscal 2023. Operating income decreased by 2% to $313 million, and diluted earnings per share decreased by 4% to $0.47.

  • Delivered broad-based reported net sales growth across all geographic clusters and the Travel Retail channel.
  • Portfolio growth was led by Jack Daniel’s Tennessee Whiskey, Woodford Reserve, and Ready-to-Drinks.
  • Reported gross margin contracted 130 basis points driven by inflation, supply chain disruption costs, and foreign exchange.
  • Reported advertising expense increased 19%.

Headline financials

Total Revenue

$1.09B

Previous: $994M+10.1%
EPS (adj)

$0.47

Previous: $0.49-4.1%
Gross Margin

56.0%

Previous: 59.3%-5.6%
Operating Margin

28.7%

Previous: 32.3%-11.1%
Effective Tax Rate

23.7%

Previous: 21.6%+9.7%
Cash Dividend Per Share

$0.19

Previous: $0.18+5.0%
Capital Expenditures

-$61M

Previous: -$33M-84.8%
Free Cash Flow

$255M

Previous: $302M-15.6%
Net Income

$227M

Previous: $236M-3.8%
Operating Income

$313M

Previous: $322M-2.8%
Gross Profit

$613M

Previous: $590M+3.9%
Cash & Equivalents

$1.09B

Previous: $1.07B+1.3%
Total Assets

$6.85B

Previous: $6.62B+3.6%
Stock-Based Comp

$5M

Previous: $3M+66.7%

Revenue & EPS history

Brown-Forman · Revenue · Quarterly

$1.09B

Q2 2023+10.1%vs Q2 2022
Beat estimate in 6 of 12 quarters(50%)
ActualEstimate

Forward guidance

The company anticipates stronger growth in fiscal 2023 despite global macroeconomic and geopolitical uncertainties.

Tailwinds

  • Expect organic net sales growth in the high-single digit range.
  • Expect reported gross margin to be consistent with the first half of fiscal 2023.
  • Anticipate high-single digit organic operating income growth.
  • Expect our fiscal 2023 effective tax rate to be in the range of approximately 22% to 23%.
  • Capital expenditures are planned to be in the range of $190 to $210 million.

Headwinds

  • Global macroeconomic uncertainties
  • Geopolitical uncertainties
  • Higher inflation
  • Supply chain disruption costs
  • Negative effect of foreign exchange

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

-0.4%

Avg return

Earnings day

-1.3%

Avg return

5 days after

-3.2%

Avg return

30 days after

41%

28 / 68 earnings

Positive

+10.4%

Q1 2021

Best reaction

-9.1%

Q3 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026-5.7%-10.8%-4.9%
Q2 2026+0.1%+0.1%-11.2%
Q1 2026-4.8%-3.9%-13.1%
Q4 2025+0.0%-0.8%+6.9%
Q3 2025+10.2%+14.6%-2.4%
Q2 2025+8.8%+10.7%-11.0%
Q1 2025+1.1%+1.0%+4.6%
Q4 2024-4.0%-6.4%-5.5%
Q3 2024-9.1%-8.1%-14.2%
Q2 2024-9.0%-6.1%-7.3%
Q1 2024-4.4%-3.0%-17.4%
Q4 2023+5.2%+2.3%+5.6%
Q3 2023-6.2%-5.9%-4.1%
Q2 2023-7.4%-6.4%-12.3%
Q1 2023-1.3%-2.1%-5.6%
Q4 2022+3.2%-0.1%+8.9%
Q3 2022+7.5%-2.0%+5.4%
Q2 2022-4.1%-2.1%-7.7%
Q1 2022+0.5%+1.0%-4.1%
Q4 2021-5.0%-4.4%-5.6%
Q3 2021-4.7%-3.2%-4.3%
Q2 2021+0.3%+4.1%-6.2%
Q1 2021+10.4%+10.8%+5.3%
Q4 2020-0.0%-3.5%-4.4%
Q3 2020-4.1%-11.3%-13.7%
Q2 2020-6.3%-6.8%-0.2%
Q1 2020-0.1%-0.8%+2.7%
Q4 2019+8.5%+10.4%+11.6%
Q3 2019-1.7%-1.3%+2.0%
Q2 2019-1.3%-2.1%-1.3%
Q1 2019+0.4%+0.3%-3.2%
Q4 2018-8.0%-6.7%-6.2%
Q3 2018-4.8%-3.5%-4.4%
Q2 2018+6.1%+4.9%+7.5%
Q1 2018+3.8%+3.8%+4.0%
Q4 2017-5.7%-6.1%-9.5%
Q3 2017-2.9%-3.7%-5.3%
Q2 2017+1.4%+1.1%-1.4%
Q1 2017-4.6%-4.6%-6.8%
Q4 2016+2.1%-0.2%+0.3%
Q3 2016-1.4%
Q2 2016+1.7%
Q1 2016+0.5%
Q4 2015-0.5%
Q3 2015-0.5%
Q2 2015+2.2%
Q1 2015-2.4%
Q4 2014+2.4%
Q3 2013+1.6%
Q3 2014+4.6%
Q2 2014+0.3%
Q1 2014-1.8%
Q4 2013-0.9%
Q2 2013-0.6%
Q1 2013+2.6%
Q2 2012-1.4%
Q4 2012+4.4%
Q3 2012-0.2%
Q1 2012-3.6%
Q4 2009-0.1%
Q2 2011-0.1%
Q4 2010-0.1%
Q4 2011-0.1%
Q3 2011-0.8%
Q3 2010-0.8%
Q1 2011+1.9%
Q1 2010+1.9%
Q2 2010+1.9%

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