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Here's How Brown-Forman (BF.B) is Placed Before Q3 Earnings
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Brown-Forman Corporation (BF.B - Free Report) is slated to release third-quarter fiscal 2024 results on Mar 6. The alcoholic beverage bigwig’s revenues and earnings are expected to have increased in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $1.13 billion, indicating growth 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 56 cents per share, suggesting growth of 19.2% from the year-ago period’s reported number. Earnings estimates for the fiscal third quarter have been unchanged in the past 30 days.
In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. In the trailing four quarters, BF.B delivered a negative earnings surprise of 3%, on average.
Brown-Forman has been witnessing strong sales trends, driven by increased demand for its brands, and growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth.
Also, BF.B 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.
The company is likely to have witnessed continued growth across brands and categories in the fiscal third 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 third 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 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.
On the last reported quarter’s earnings call, management expected to deliver solid organic sales growth throughout fiscal 2024, driven by its pricing and revenue growth management strategies, and portfolio premiumization. The persistence of these trends is likely to have aided the company’s performance in the fiscal third quarter.
Our model predicts the tequila category to register sales growth of 8.9% in the fiscal third quarter. Meanwhile, other key categories, including wine, vodka and RTD, are likely to report sales growth of 26.9%, 3.6%, and 21.3%, respectively. Meanwhile, the whiskey category is expected to witness a decline of 1.3%.
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.
On the last reported quarter’s earnings call, management expected inflation to continue affecting input costs throughout fiscal 2024. Higher inflation is expected to have slightly hurt the gross margin in the to-be-reported quarter, offset by the benefits of the easing supply-chain disruption-related costs and lower tariff-related costs due to the removal of the U.K. tariffs on American whiskey.
Our model predicts a gross margin of 61.3%, suggesting a 360-bps expansion from the year-ago quarter’s actual.
The company has 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. Elevated advertising costs are likely to have resulted from the increased promotions for its brands.
On the last reported quarter’s earnings call, management expected SG&A expense growth to remain higher than historical averages through the rest of fiscal 2024 due to expectations of higher compensation-related expenses and expenses related to the transition to own distribution in Japan. This is expected to get reflected in the SG&A expenses for the fiscal third quarter.
We expect advertising expenses to increase 0.7% year over year to $142 million in the fiscal third quarter, along with a 5.1% increase in selling, general and administrative expenses.
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 -3.18% and a Zacks Rank #4 (Sell) at present.
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 +1.12% and a Zacks Rank #3. The company is anticipated to register top and bottom-line growth in fourth-quarter fiscal 2023. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $649.1 million, suggesting growth of 18.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ollie's quarterly earnings has been unchanged in the past 30 days at $1.16 per share, suggesting 38.1% growth from the year-ago quarter's reported number. OLLI delivered an earnings surprise of 7%, on average, in the trailing four quarters.
Simply Good Foods (SMPL - Free Report) currently has an Earnings ESP of +1.06% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for SMPL’s quarterly earnings has been unchanged in the past 30 days at 56 cents per share, suggesting growth of 19.2% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Simply Good’s quarterly revenues is pegged at $1.13 billion, which suggests growth of 4.3% from the figure reported in the prior-year quarter. SMPL delivered an earnings surprise of 4.7%, on average, in the trailing four quarters.
Philip Morris International (PM - Free Report) currently has an Earnings ESP of +0.11% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for PM’s quarterly revenues is pegged at $8.4 billion, which suggests growth of 3.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Philip Morris’ bottom line has moved down 2.8% in the past 30 days to $1.40 per share, which suggests growth of 1.5% from the figure reported in the prior-year quarter. PM has delivered an earnings surprise of 2.5%, on average, in the trailing four quarters.
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Here's How Brown-Forman (BF.B) is Placed Before Q3 Earnings
Brown-Forman Corporation (BF.B - Free Report) is slated to release third-quarter fiscal 2024 results on Mar 6. The alcoholic beverage bigwig’s revenues and earnings are expected to have increased in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $1.13 billion, indicating growth 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 56 cents per share, suggesting growth of 19.2% from the year-ago period’s reported number. Earnings estimates for the fiscal third quarter have been unchanged in the past 30 days.
In the last reported quarter, the company’s earnings came in line with the Zacks Consensus Estimate. In the trailing four quarters, BF.B delivered a negative earnings surprise of 3%, 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, and growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth.
Also, BF.B 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.
The company is likely to have witnessed continued growth across brands and categories in the fiscal third 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 third 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 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.
On the last reported quarter’s earnings call, management expected to deliver solid organic sales growth throughout fiscal 2024, driven by its pricing and revenue growth management strategies, and portfolio premiumization. The persistence of these trends is likely to have aided the company’s performance in the fiscal third quarter.
Our model predicts the tequila category to register sales growth of 8.9% in the fiscal third quarter. Meanwhile, other key categories, including wine, vodka and RTD, are likely to report sales growth of 26.9%, 3.6%, and 21.3%, respectively. Meanwhile, the whiskey category is expected to witness a decline of 1.3%.
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.
On the last reported quarter’s earnings call, management expected inflation to continue affecting input costs throughout fiscal 2024. Higher inflation is expected to have slightly hurt the gross margin in the to-be-reported quarter, offset by the benefits of the easing supply-chain disruption-related costs and lower tariff-related costs due to the removal of the U.K. tariffs on American whiskey.
Our model predicts a gross margin of 61.3%, suggesting a 360-bps expansion from the year-ago quarter’s actual.
The company has 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. Elevated advertising costs are likely to have resulted from the increased promotions for its brands.
On the last reported quarter’s earnings call, management expected SG&A expense growth to remain higher than historical averages through the rest of fiscal 2024 due to expectations of higher compensation-related expenses and expenses related to the transition to own distribution in Japan. This is expected to get reflected in the SG&A expenses for the fiscal third quarter.
We expect advertising expenses to increase 0.7% year over year to $142 million in the fiscal third quarter, along with a 5.1% increase in selling, general and administrative expenses.
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 -3.18% and a Zacks Rank #4 (Sell) at present.
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 +1.12% and a Zacks Rank #3. The company is anticipated to register top and bottom-line growth in fourth-quarter fiscal 2023. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $649.1 million, suggesting growth of 18.1% 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 has been unchanged in the past 30 days at $1.16 per share, suggesting 38.1% growth from the year-ago quarter's reported number. OLLI delivered an earnings surprise of 7%, on average, in the trailing four quarters.
Simply Good Foods (SMPL - Free Report) currently has an Earnings ESP of +1.06% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for SMPL’s quarterly earnings has been unchanged in the past 30 days at 56 cents per share, suggesting growth of 19.2% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Simply Good’s quarterly revenues is pegged at $1.13 billion, which suggests growth of 4.3% from the figure reported in the prior-year quarter. SMPL delivered an earnings surprise of 4.7%, on average, in the trailing four quarters.
Philip Morris International (PM - Free Report) currently has an Earnings ESP of +0.11% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for PM’s quarterly revenues is pegged at $8.4 billion, which suggests growth of 3.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Philip Morris’ bottom line has moved down 2.8% in the past 30 days to $1.40 per share, which suggests growth of 1.5% from the figure reported in the prior-year quarter. PM has delivered an earnings surprise of 2.5%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.