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Brown-Forman (BF.B) Q1 Earnings Upcoming: What's in the Cards?
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Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2025 results on Aug 29. The alcoholic beverage bigwig’s revenues and earnings are expected to have declined in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $990 million, indicating a decline of 4.6% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 46 cents per share, suggesting a decline of 4.2% from the year-ago period’s reported number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 33.3%. In the trailing four quarters, BF.B delivered a negative earnings surprise of 8.2%, on average.
Key Factors to Note
Brown-Forman has been benefiting from the success of its portfolio premiumization strategy, pricing initiatives, revenue growth management strategies and aggressive brand investments. Gains across its premium and super-premium brands have been contributing to its top-line growth. BF.B has been witnessing increased demand for its brands, and growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth.
On the last reported quarter’s earnings call, management stated that it was poised to deliver organic sales growth in fiscal 2025, driven by its pricing and revenue-growth management strategies, and gains from normalizing inventory trends. Gains from these initiatives are expected to have aided organic sales in the fiscal first quarter.
The company is likely to have witnessed continued growth across brands and categories in the fiscal first quarter. Strength in the Jack Daniel’s family of brands and the momentum in Ready-to-Drink (RTD) have been key drivers. Sales in the fiscal first quarter are expected to have gained from the continued consumer interest in flavor and convenience, aiding the performances of Jack Daniel’s RTD, Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire.
BF.B has also been on track with its pricing strategy, which has been aiming to increase prices year over year to grow sales as part of its revenue growth management initiatives. Gains from improved pricing are likely to get reflected in the company’s top-line results in the to-be-reported quarter.
However, Brown-Forman has been witnessing several headwinds, including higher input costs due to inflation, tough distributor inventory comparisons and rising advertising expenses due to investments in its brands.
Brown-Forman has been witnessing higher input costs due to continued inflation in prices for agave, wood and grain. Higher input costs for these commodities have been hurting the gross margin. Going ahead, the company expects inflation to continue to negatively impact its input costs.
BF.B is expected to have witnessed tough distributor inventory comparisons for some time now due to the significant rebuilding of inventory in the prior-year quarter. The last year’s inventory rebuild was mainly the result of supply-chain disruptions.
The company has been witnessing elevated operating expenses due to higher advertising and selling, general and administrative (SG&A) expenses. The incremental advertising spend mainly relates to the launch and acquisition of brands, as well as investment in its existing portfolio. This is likely to have partly dented margins and the bottom line in the to-be-reported quarter. Elevated advertising costs are likely to have resulted from the increased promotions for its brands.
Our model predicts a gross margin of 64.1% for the fiscal first quarter, suggesting a 140-bps expansion from the year-ago quarter’s actual. Our model estimates SG&A expenses to increase 2.8% year over year, with a 140-bps rise in the SG&A expense rate.
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 is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Brown-Forman has an Earnings ESP of -3.98% and a Zacks Rank #3 at present.
Stocks With Favorable Combinations
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is anticipated to register top and bottom-line growth in fourth-quarter fiscal 2024. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80.1 million, suggesting growth of 1.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Costco's quarterly earnings has been unchanged in the past 30 days at $5.02 per share, suggesting 3.3% growth from the year-ago quarter's reported number. COST delivered an earnings surprise of 2.3%, on average, in the trailing four quarters.
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is expected to register top-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for J. M. Smucker’s quarterly revenues is pegged at $2.1 billion, which indicates growth of 18.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for SJM’s quarterly earnings has moved down by a penny in the past seven days to $2.18 per share, suggesting a decline of 1.4% from the year-ago quarter's reported number. SJM delivered an earnings surprise of 8.9%, on average, in the trailing four quarters.
Chewy (CHWY - Free Report) currently has an Earnings ESP of +4.55% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for CHWY quarterly revenues is pegged at $2.9 billion, which suggests growth of 2.8% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Chewy’s earnings has been unchanged in the past 30 days at 22 cents per share, which implies growth of 46.7% from the figure reported in the prior-year quarter. CHWY has delivered an earnings surprise of 57.7%, on average, in the trailing four quarters.
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Brown-Forman (BF.B) Q1 Earnings Upcoming: What's in the Cards?
Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2025 results on Aug 29. The alcoholic beverage bigwig’s revenues and earnings are expected to have declined in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $990 million, indicating a decline of 4.6% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 46 cents per share, suggesting a decline of 4.2% from the year-ago period’s reported number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 33.3%. In the trailing four quarters, BF.B delivered a negative earnings surprise of 8.2%, on average.
Key Factors to Note
Brown-Forman has been benefiting from the success of its portfolio premiumization strategy, pricing initiatives, revenue growth management strategies and aggressive brand investments. Gains across its premium and super-premium brands have been contributing to its top-line growth. BF.B has been witnessing increased demand for its brands, and growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth.
On the last reported quarter’s earnings call, management stated that it was poised to deliver organic sales growth in fiscal 2025, driven by its pricing and revenue-growth management strategies, and gains from normalizing inventory trends. Gains from these initiatives are expected to have aided organic sales in the fiscal first quarter.
Brown-Forman Corporation Price and EPS Surprise
Brown-Forman Corporation price-eps-surprise | Brown-Forman Corporation Quote
The company is likely to have witnessed continued growth across brands and categories in the fiscal first quarter. Strength in the Jack Daniel’s family of brands and the momentum in Ready-to-Drink (RTD) have been key drivers. Sales in the fiscal first quarter are expected to have gained from the continued consumer interest in flavor and convenience, aiding the performances of Jack Daniel’s RTD, Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire.
BF.B has also been on track with its pricing strategy, which has been aiming to increase prices year over year to grow sales as part of its revenue growth management initiatives. Gains from improved pricing are likely to get reflected in the company’s top-line results in the to-be-reported quarter.
However, Brown-Forman has been witnessing several headwinds, including higher input costs due to inflation, tough distributor inventory comparisons and rising advertising expenses due to investments in its brands.
Brown-Forman has been witnessing higher input costs due to continued inflation in prices for agave, wood and grain. Higher input costs for these commodities have been hurting the gross margin. Going ahead, the company expects inflation to continue to negatively impact its input costs.
BF.B is expected to have witnessed tough distributor inventory comparisons for some time now due to the significant rebuilding of inventory in the prior-year quarter. The last year’s inventory rebuild was mainly the result of supply-chain disruptions.
The company has been witnessing elevated operating expenses due to higher advertising and selling, general and administrative (SG&A) expenses. The incremental advertising spend mainly relates to the launch and acquisition of brands, as well as investment in its existing portfolio. This is likely to have partly dented margins and the bottom line in the to-be-reported quarter. Elevated advertising costs are likely to have resulted from the increased promotions for its brands.
Our model predicts a gross margin of 64.1% for the fiscal first quarter, suggesting a 140-bps expansion from the year-ago quarter’s actual. Our model estimates SG&A expenses to increase 2.8% year over year, with a 140-bps rise in the SG&A expense rate.
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 is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Brown-Forman has an Earnings ESP of -3.98% and a Zacks Rank #3 at present.
Stocks With Favorable Combinations
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Costco Wholesale (COST - Free Report) currently has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is anticipated to register top and bottom-line growth in fourth-quarter fiscal 2024. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80.1 million, suggesting growth of 1.4% from the figure reported in the prior-year quarter.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Costco's quarterly earnings has been unchanged in the past 30 days at $5.02 per share, suggesting 3.3% growth from the year-ago quarter's reported number. COST delivered an earnings surprise of 2.3%, on average, in the trailing four quarters.
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is expected to register top-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for J. M. Smucker’s quarterly revenues is pegged at $2.1 billion, which indicates growth of 18.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for SJM’s quarterly earnings has moved down by a penny in the past seven days to $2.18 per share, suggesting a decline of 1.4% from the year-ago quarter's reported number. SJM delivered an earnings surprise of 8.9%, on average, in the trailing four quarters.
Chewy (CHWY - Free Report) currently has an Earnings ESP of +4.55% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for CHWY quarterly revenues is pegged at $2.9 billion, which suggests growth of 2.8% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Chewy’s earnings has been unchanged in the past 30 days at 22 cents per share, which implies growth of 46.7% from the figure reported in the prior-year quarter. CHWY has delivered an earnings surprise of 57.7%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.