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BF/A NYSE· Brown-Forman Corp
Earnings report Q3 2023

Brown-Forman Corporation Sees Modest Revenue Growth Amid Mixed Market Performance

Segments of Revenue

Brown-Forman Corporation reported net sales of $1.04 billion for the latest quarter, marking a 3% increase from the previous year's figure of $1.007 billion. The company's revenue performance varied across different markets. In the United States, net sales declined by 9%, while in the Developed International market, net sales remained flat. Germany saw a 4% increase in net sales, while the United Kingdom experienced a significant 15% rise. However, Australia and Japan saw declines in net sales by 13% and 88% respectively. The Emerging market segment showed strong growth, with net sales increasing by 32%.

Strengths

The company's strength lies in its ability to maintain a positive revenue growth despite the mixed market performance. The increase in gross margin to 62.7% from 61.8% in the same period last year, driven by favorable price/mix, lower supply chain disruption related costs, and lower tariff-related costs, also contributed to the company's financial performance.

Challenges

The corporation faced challenges in the form of higher operating expenses, which partially offset the higher gross margin. This resulted in a 4% decrease in reported operating income compared to the same period last year. The company also faced a decrease in net sales in key markets such as the United States, Australia, and Japan.

Noteworthy

Despite the mixed market performance, the company managed to deliver a 5% increase in gross profit, reaching $651 million. However, it's worth noting that the company's diluted earnings per share decreased by 7%, driven primarily by the decrease in reported operating income and higher interest expense.

Summary

Brown-Forman Corporation's latest quarter saw a modest increase in revenue, despite facing challenges in key markets and higher operating expenses. The company's ability to maintain a positive revenue growth and increase in gross profit highlights its resilience. However, the decrease in diluted earnings per share indicates potential areas of concern that need to be addressed.

Source documents

Form 10-Q  filed on Aug 30, 2023
92 pages scanned

Reference data

Company financials Q3 revenue 1.11B
Analyst estimates Q3 EPS missed by NaN%
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