Key facts
- Brown-Forman's first-quarter sales fell 1% to $911 million, missing analyst estimates.
- Softer demand for spirits is attributed to inflation and changing consumer habits.
- Sales of core whiskey brands like Jack Daniel's, Woodford Reserve, and Old Forester declined.
- Jack Daniel's Tennessee Apple showed strong sales growth.
- The company has lowered its 2024 net sales forecast due to challenging economic conditions.
- Potential tariffs on American whiskey exports to the EU pose a future risk.
Brown-Forman, the maker of Jack Daniel's, reported a 1% decline in first-quarter sales to $911 million, falling short of analysts' average estimate of $914.9 million. The company attributed the weaker performance to reduced demand for premium spirits as inflation impacts consumer spending and younger generations increasingly moderate alcohol consumption.
Overall whiskey sales at Brown-Forman dropped 2% year over year, with specific declines noted for Woodford Reserve (down 3%) and Old Forester (down 5%). However, Jack Daniel's Tennessee Apple saw a significant 50% increase in sales, indicating consumer interest in flavored whiskeys. In response to the challenging economic environment and evolving global macroeconomic conditions, Brown-Forman has lowered its net sales forecast for 2024.
The company also faces potential headwinds from a proposed 50% tariff on American whiskey exports to the European Union, which is a retaliatory measure for U.S. tariffs on European steel and aluminum. Brown-Forman is actively engaging with governments on both sides of the Atlantic to advocate for a stable trade relationship.