We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Brown-Forman (BF.B) Beat on Q1 Earnings Despite High Costs?
Read MoreHide Full Article
Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2024 results on Aug 30. The alcoholic beverage bigwig’s revenues are expected to have increased in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $1.05 billion, indicating growth of 4.7% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 52 cents per share, suggesting no change from the year-ago period’s recorded number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
The company delivered a negative earnings surprise of 4.4% in the last reported quarter. In the trailing four quarters, its earnings underperformed the Zacks Consensus Estimate by 2.7%, on average.
Brown-Forman has been witnessing strong sales trends, driven by increased demand for its brands, growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth. Sales have been benefiting from an increase in distributor inventories. Also, BF.B has been benefiting from recent acquisitions, portfolio premiumization, product innovation and strategic relationships.
The company has been benefiting from growth across brands and categories. Growth in the tequila categories, mainly Herradura and el Jimado, is expected to have contributed to strong sales in the fiscal first quarter. Sales in the quarter under review are also expected to have gained from the continued consumer interest in flavor and convenience, which boosted the performance of Jack Daniel’s Ready-to-Drink (RTD), Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire.
On the last reported quarter’s earnings call, management expected strength in its brand portfolio, strong consumer demand and the return of inventories to more normalized levels to aid organic sales growth throughout fiscal 2024. The persistence of these trends is likely to have aided the company’s performance in the fiscal first quarter.
Our model predicts the tequila category to register sales growth of 12.7% in the fiscal first quarter. Meanwhile, other key categories, including Wine, Vodka and Whiskey, are likely to report sales growth of 10.2%, 6.2% and 1.8%, respectively.
BF.B has also been on track with its pricing strategy, which aims 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 performance in the to-be-reported quarter.
However, the company has been witnessing several headwinds, including supply-chain challenges, higher input costs due to inflation, the significant impacts of negative foreign exchange and Russia’s invasion of Ukraine.
On the last reported quarter’s earnings call, management expected inflation to continue negatively impacting input costs throughout fiscal 2024. Higher inflation is expected to mar the gross margin in the to-be-reported quarter.
The company has also been witnessing higher advertising expenses due to continued investments in its brands. This is likely to have partly dented margins and the bottom line in the to-be-reported quarter. Higher compensation expenses, rising discretionary spending, and acquisition and integration costs for the Gin Mare and Diplomatico brands are expected to have led to higher SG&A expenses in the fiscal first quarter.
We expect total operating expenses to increase 15.6% year over year to $322.5 million in the fiscal first quarter, driven by a 1.9% rise in advertising expenses and a 3.9% increase in selling, general and administrative expenses.
Our model predicts an operating margin of 32.4%, suggesting a 170-bps contraction from the year-ago quarter’s actual.
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 an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks With Favorable Combinations
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:
Ollie's Bargain Outlet (OLLI - Free Report) currently has an Earnings ESP of +6.12% and a Zacks Rank #2. The company is anticipated to register top and bottom-line growth in second-quarter fiscal 2023. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $497.6 million, suggesting growth of 10% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ollie's quarterly earnings was unchanged in the last 30 days at 61 cents per share, suggesting 177.3% growth from the year-ago quarter's reported number. OLLI delivered a negative earnings surprise of 9.5%, on average, in the trailing four quarters.
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +0.24% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for SJM’s quarterly earnings moved down by a penny in the last seven days to $2.07 per share, suggesting growth of 24% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for J. M. Smucker’s quarterly revenues is pegged at $1.8 billion, which suggests a decline of 1.7% from the figure reported in the prior-year quarter. SJM delivered an earnings surprise of 14%, on average, in the trailing four quarters.
Five Below (FIVE - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for FIVE’s quarterly revenues is pegged at $760.2 million, which suggests growth of 13.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Five Below’s bottom line was unchanged in the last 30 days at 83 cents per share, which suggests growth of 12.2% from the figure reported in the prior-year quarter. FIVE has delivered an earnings surprise of 27.9%, on average, in the trailing four quarters.
Image: Bigstock
Can Brown-Forman (BF.B) Beat on Q1 Earnings Despite High Costs?
Brown-Forman Corporation (BF.B - Free Report) is slated to release first-quarter fiscal 2024 results on Aug 30. The alcoholic beverage bigwig’s revenues are expected to have increased in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $1.05 billion, indicating growth of 4.7% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 52 cents per share, suggesting no change from the year-ago period’s recorded number. Earnings estimates for the fiscal first quarter have been unchanged in the past 30 days.
The company delivered a negative earnings surprise of 4.4% in the last reported quarter. In the trailing four quarters, its earnings underperformed the Zacks Consensus Estimate by 2.7%, on average.
Brown-Forman Corporation Price and EPS Surprise
Brown-Forman Corporation price-eps-surprise | Brown-Forman Corporation Quote
Key Factors to Note
Brown-Forman has been witnessing strong sales trends, driven by increased demand for its brands, growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth. Sales have been benefiting from an increase in distributor inventories. Also, BF.B has been benefiting from recent acquisitions, portfolio premiumization, product innovation and strategic relationships.
The company has been benefiting from growth across brands and categories. Growth in the tequila categories, mainly Herradura and el Jimado, is expected to have contributed to strong sales in the fiscal first quarter. Sales in the quarter under review are also expected to have gained from the continued consumer interest in flavor and convenience, which boosted the performance of Jack Daniel’s Ready-to-Drink (RTD), Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire.
On the last reported quarter’s earnings call, management expected strength in its brand portfolio, strong consumer demand and the return of inventories to more normalized levels to aid organic sales growth throughout fiscal 2024. The persistence of these trends is likely to have aided the company’s performance in the fiscal first quarter.
Our model predicts the tequila category to register sales growth of 12.7% in the fiscal first quarter. Meanwhile, other key categories, including Wine, Vodka and Whiskey, are likely to report sales growth of 10.2%, 6.2% and 1.8%, respectively.
BF.B has also been on track with its pricing strategy, which aims 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 performance in the to-be-reported quarter.
However, the company has been witnessing several headwinds, including supply-chain challenges, higher input costs due to inflation, the significant impacts of negative foreign exchange and Russia’s invasion of Ukraine.
On the last reported quarter’s earnings call, management expected inflation to continue negatively impacting input costs throughout fiscal 2024. Higher inflation is expected to mar the gross margin in the to-be-reported quarter.
The company has also been witnessing higher advertising expenses due to continued investments in its brands. This is likely to have partly dented margins and the bottom line in the to-be-reported quarter. Higher compensation expenses, rising discretionary spending, and acquisition and integration costs for the Gin Mare and Diplomatico brands are expected to have led to higher SG&A expenses in the fiscal first quarter.
We expect total operating expenses to increase 15.6% year over year to $322.5 million in the fiscal first quarter, driven by a 1.9% rise in advertising expenses and a 3.9% increase in selling, general and administrative expenses.
Our model predicts an operating margin of 32.4%, suggesting a 170-bps contraction from the year-ago quarter’s actual.
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 an Earnings ESP of 0.00% and a Zacks Rank #3.
Stocks With Favorable Combinations
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:
Ollie's Bargain Outlet (OLLI - Free Report) currently has an Earnings ESP of +6.12% and a Zacks Rank #2. The company is anticipated to register top and bottom-line growth in second-quarter fiscal 2023. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $497.6 million, suggesting growth of 10% 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 Ollie's quarterly earnings was unchanged in the last 30 days at 61 cents per share, suggesting 177.3% growth from the year-ago quarter's reported number. OLLI delivered a negative earnings surprise of 9.5%, on average, in the trailing four quarters.
The J. M. Smucker Co. (SJM - Free Report) currently has an Earnings ESP of +0.24% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for SJM’s quarterly earnings moved down by a penny in the last seven days to $2.07 per share, suggesting growth of 24% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for J. M. Smucker’s quarterly revenues is pegged at $1.8 billion, which suggests a decline of 1.7% from the figure reported in the prior-year quarter. SJM delivered an earnings surprise of 14%, on average, in the trailing four quarters.
Five Below (FIVE - Free Report) currently has an Earnings ESP of +1.21% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for FIVE’s quarterly revenues is pegged at $760.2 million, which suggests growth of 13.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Five Below’s bottom line was unchanged in the last 30 days at 83 cents per share, which suggests growth of 12.2% from the figure reported in the prior-year quarter. FIVE has delivered an earnings surprise of 27.9%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.