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Here's How Brown-Forman (BF.B) Looks Just Ahead of Q4 Earnings
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Brown-Forman Corporation (BF.B - Free Report) is slated to release fourth-quarter fiscal 2022 results on Jun 8. The alcoholic beverage bigwig is likely to deliver revenue growth in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $846.9 million, indicating an increase of 4.3% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 25 cents per share, which is expected to be flat with the year-ago period’s reported figure. Earnings estimates for the fiscal fourth quarter have been unchanged in the past 30 days.
The Zacks Consensus Estimate for fiscal 2022 revenues is pegged at $3.8 billion, suggesting 9.3% growth from the prior year’s reported figure. The Zacks Consensus Estimate for the company’s earnings for fiscal 2022 is pegged at $1.68 per share, suggesting an increase of 4.4% from the year-ago reported figure. Earnings estimates for fiscal 2022 have been unchanged in the past 30 days.
The company delivered an earnings surprise of 12.5% in the last reported quarter. However, its earnings underperformed the Zacks Consensus Estimate by 3.4%, on average, in the trailing four quarters.
Brown-Forman has been witnessing strong underlying sales trends, driven by solid performances in international and emerging markets, as well as gains in the United States, and a recovery in the Travel Retail channel. Robust consumer demand, strong portfolio and growth across markets are expected to have aided the top line in the to-be-reported quarter.
Strength in the American whiskey and tequila categories, along with consumers’ preference for premium spirits, has been aiding sales growth. The Woodford Reserve and the Old Forester trademarks have been mainly driving growth of the bourbon category in the United States. Higher volume and prices for tequilas, Herradura and el Jimador have been other drivers.
The company’s fourth-quarter fiscal 2022 performance is expected to have benefited from its focus on investing in the diversification of its brand portfolio to drive growth. Its investments in brands have centered around the broadening of the Jack Daniel’s family of brands, while exiting the weaker brands and expanding the fast-growing premium spirits categories.
Management anticipates organic net sales growth of 11-13% for fiscal 2022, mainly driven by the strong results in the first three quarters and robust consumer demand.
However, soft margins and higher costs have been hurting the bottom line for the past few quarters. The company’s operating margin in the fiscal fourth quarter is expected to have been hurt by operating expense deleverage due to higher SG&A expenses and advertising costs, and supply-chain headwinds. Advertising expenses are expected to have been high in the fiscal fourth quarter, driven by continued investments in its brands.
On its last reported quarter’s earnings call, the company expected supply-chain constraints and higher freight costs to persist throughout fiscal 2022, suggesting notable impacts on the gross margin in the to-be-reported quarter and fiscal 2022. As a result, the company expected the reported gross margin for fiscal 2022 to be flat or slightly down year over year. Management expected organic operating expenses, including advertising and SG&A expenses, to increase 7-9% for fiscal 2022. Organic advertising expenses are anticipated to be slightly below the organic sales growth projection.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Brown-Forman has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Archer Daniels Midland (ADM - Free Report) has an Earnings ESP of +2.99% and it currently sports a Zacks Rank #1. The company is anticipated to have registered top and bottom-line growth in second-quarter 2022. The Zacks Consensus Estimate for ADM’s quarterly earnings moved up 5% in the last 30 days to $1.67 per share, suggesting 25.6% growth from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Archer Daniels’ quarterly revenues is pegged at $25.1 billion, suggesting growth of 9.4% from the figure reported in the prior-year quarter. ADM has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.
Hershey (HSY - Free Report) currently has an Earnings ESP of +4.73% and a Zacks Rank of 3. The company is expected to have registered top and bottom-line growth in second-quarter 2022. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.22 billion, which suggests a rise of 11.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for HSY’s quarterly earnings moved down by a penny in the last 30 days to $1.66 per share. However, it suggests 12.9% growth from the year-ago quarter's reported number. HSY has delivered an earnings beat of 7.9%, on average, in the trailing four quarters.
Mondelez International (MDLZ - Free Report) currently has an Earnings ESP of +0.22% and a Zacks Rank #3. The company is expected to register top-line growth when it reports second-quarter 2022 numbers. The Zacks Consensus Estimate for MDLZ’s quarterly earnings was unchanged in the last 30 days at 65 cents per share, suggesting a decline of 1.5% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $6.8 billion, which suggests growth of 2.5% from the figure reported in the prior-year quarter. MDLZ has delivered an earnings beat of 3.4%, on average, in the trailing four quarters.
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Here's How Brown-Forman (BF.B) Looks Just Ahead of Q4 Earnings
Brown-Forman Corporation (BF.B - Free Report) is slated to release fourth-quarter fiscal 2022 results on Jun 8. The alcoholic beverage bigwig is likely to deliver revenue growth in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $846.9 million, indicating an increase of 4.3% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 25 cents per share, which is expected to be flat with the year-ago period’s reported figure. Earnings estimates for the fiscal fourth quarter have been unchanged in the past 30 days.
The Zacks Consensus Estimate for fiscal 2022 revenues is pegged at $3.8 billion, suggesting 9.3% growth from the prior year’s reported figure. The Zacks Consensus Estimate for the company’s earnings for fiscal 2022 is pegged at $1.68 per share, suggesting an increase of 4.4% from the year-ago reported figure. Earnings estimates for fiscal 2022 have been unchanged in the past 30 days.
The company delivered an earnings surprise of 12.5% in the last reported quarter. However, its earnings underperformed the Zacks Consensus Estimate by 3.4%, on average, in the trailing four quarters.
BrownForman Corporation Price and EPS Surprise
BrownForman Corporation price-eps-surprise | BrownForman Corporation Quote
Key Factors to Note
Brown-Forman has been witnessing strong underlying sales trends, driven by solid performances in international and emerging markets, as well as gains in the United States, and a recovery in the Travel Retail channel. Robust consumer demand, strong portfolio and growth across markets are expected to have aided the top line in the to-be-reported quarter.
Strength in the American whiskey and tequila categories, along with consumers’ preference for premium spirits, has been aiding sales growth. The Woodford Reserve and the Old Forester trademarks have been mainly driving growth of the bourbon category in the United States. Higher volume and prices for tequilas, Herradura and el Jimador have been other drivers.
The company’s fourth-quarter fiscal 2022 performance is expected to have benefited from its focus on investing in the diversification of its brand portfolio to drive growth. Its investments in brands have centered around the broadening of the Jack Daniel’s family of brands, while exiting the weaker brands and expanding the fast-growing premium spirits categories.
Management anticipates organic net sales growth of 11-13% for fiscal 2022, mainly driven by the strong results in the first three quarters and robust consumer demand.
However, soft margins and higher costs have been hurting the bottom line for the past few quarters. The company’s operating margin in the fiscal fourth quarter is expected to have been hurt by operating expense deleverage due to higher SG&A expenses and advertising costs, and supply-chain headwinds. Advertising expenses are expected to have been high in the fiscal fourth quarter, driven by continued investments in its brands.
On its last reported quarter’s earnings call, the company expected supply-chain constraints and higher freight costs to persist throughout fiscal 2022, suggesting notable impacts on the gross margin in the to-be-reported quarter and fiscal 2022. As a result, the company expected the reported gross margin for fiscal 2022 to be flat or slightly down year over year. Management expected organic operating expenses, including advertising and SG&A expenses, to increase 7-9% for fiscal 2022. Organic advertising expenses are anticipated to be slightly below the organic sales growth projection.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Brown-Forman has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Archer Daniels Midland (ADM - Free Report) has an Earnings ESP of +2.99% and it currently sports a Zacks Rank #1. The company is anticipated to have registered top and bottom-line growth in second-quarter 2022. The Zacks Consensus Estimate for ADM’s quarterly earnings moved up 5% in the last 30 days to $1.67 per share, suggesting 25.6% growth from the year-ago quarter's reported number.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Archer Daniels’ quarterly revenues is pegged at $25.1 billion, suggesting growth of 9.4% from the figure reported in the prior-year quarter. ADM has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.
Hershey (HSY - Free Report) currently has an Earnings ESP of +4.73% and a Zacks Rank of 3. The company is expected to have registered top and bottom-line growth in second-quarter 2022. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.22 billion, which suggests a rise of 11.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for HSY’s quarterly earnings moved down by a penny in the last 30 days to $1.66 per share. However, it suggests 12.9% growth from the year-ago quarter's reported number. HSY has delivered an earnings beat of 7.9%, on average, in the trailing four quarters.
Mondelez International (MDLZ - Free Report) currently has an Earnings ESP of +0.22% and a Zacks Rank #3. The company is expected to register top-line growth when it reports second-quarter 2022 numbers. The Zacks Consensus Estimate for MDLZ’s quarterly earnings was unchanged in the last 30 days at 65 cents per share, suggesting a decline of 1.5% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Mondelez’s quarterly revenues is pegged at $6.8 billion, which suggests growth of 2.5% from the figure reported in the prior-year quarter. MDLZ has delivered an earnings beat of 3.4%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.