Jack Daniel's Maker Brown-Forman Falls as Sales Sink and Firm Lowers Its Guidance

Jack Daniel's owner Brown-Forman (BF.A) was the worst-performing stock in the S&P 500 as shares fell over 7% in intraday trading Wednesday after the spirits maker reported sales slumped and lowered its guidance to reflect what CEO Lawson Whiting called “a year with significant uncertainty and complexity” in the industry.

Brown-Forman reported third-quarter fiscal 2024 revenue fell 1% from the year-ago period to $1.07 billion, short of analyst estimates. Profit came in at 60 cents, higher than forecasts. 

In the first nine months of the company's fiscal year, revenue rose 1% to $3.21 billion, with earnings per share (EPS) of $1.58. The gains were driven by a 79% jump in sales at its "Rest of Portfolio" unit, thanks to recently acquired Gin Mare and Diplomatico brands. Also higher were sales of Jack Daniel’s Tennessee Apple, which were up 44%. However, net sales of its most-popular drink, Jack Daniel’s Tennessee Whiskey, slipped 6%.

The company warned that the operating environment “continues to be challenging,” and added that it was “tempering” expectations for a second straight quarter as it dealt with “evolving global macroeconomic conditions and normalizing industry trends.”

Brown-Forman said it now anticipates full-year organic net sales to be flat, reflecting “the slower than anticipated growth for the nine months ended January 31, 2024.” Previously, the company predicted an increase of 3% to 5%. It projects organic operating income in the 0% to 2% range, down from the earlier 4% to 6% growth outlook. Brown-Forman also plans to cut capital spending to $230 million to $240 million from an earlier projected $250 million to $270 million. 

Shares of Brown-Forman were down 7.9% at $56.26 as of 3:25 p.m. ET Wednesday. They've lost more than 16% of their value over the past year.