Brown-Forman Corporation Class A (NYSE: BF.A) stock rose 0.1% on August 29th, 2018 after the company posted better than expected results for the first quarter 2019.
BF.A in the first quarter of FY 19 has reported the adjusted earnings per share of 41 cents, beating the analysts’ estimates for the adjusted earnings per share of 39 cents. The company had reported the adjusted revenue growth of 6 percent to $766 million in the first quarter of FY 19, beating the analysts’ estimates for revenue of $756.4 million.
Additionally, for the first quarter of 2019, the company’s underlying advertising spend rose 17% (+14% reported) during the first quarter, as the company continued to invest across the portfolio of brands, including the new Woodford Reserve Kentucky Derby sponsorship. Underlying SG&A rose 5% for the quarter (+4% reported), driven primarily by higher personnel costs. The company delivered underlying operating income growth of 10% (+7% reported).
Moreover, developed international markets grew underlying net sales by 16% (+12% reported), emerging markets grew underlying net sales by 11% (+7% reported), and the United States grew underlying net sales by 2% (0% reported). The Jack Daniel’s family of brands underlying net sales grew 10% (+7% reported), including 8% underlying net sales growth (+5% reported) for Jack Daniel’s Tennessee Whiskey. The company’s super-premium American whiskey brands grew underlying net sales +25% (+24% reported), including 29% underlying net sales growth from Woodford Reserve (+30% reported). Herradura and el Jimador grew underlying net sales 10% and 11%, respectively (+11% and +10%, reported)
During the first quarter of 2019, BF.A has approved a share repurchase authorization of $200 million, effective through July 12, 2019, subject to market and other conditions. On July 26, 2018, Brown-Forman declared a regular quarterly cash dividend of $0.158 per share on the split-adjusted Class A and Class B common stock, equating to an annualized cash dividend of $0.632 per share. The quarterly cash dividend is payable on October 1, 2018 to stockholders of record on September 6, 2018.
For FY 19, BF.A expects the underlying net sales growth of 6% to 7%. There is an expectation of a slight increase in underlying SG&A, and underlying A&P up in-line with underlying net sales growth. For 2019, the underlying operating income growth is expected to be in the range of 4% to 6% and the diluted earnings per share is expected to be in the range of $1.65 to $1.75.