Jack Daniel's maker Brown-Forman misses quarterly results on tepid demand

(Reuters) - Brown-Forman missed first-quarter profit and sales estimates on Thursday, hurt by higher input costs and weaker demand for its pricey whiskey and spirits.

The company's whiskey business, which includes Jack Daniel's Tennessee Whiskey, posted a 5% fall in sales for the quarter ended July 31 as consumers wrestling with rising costs of living cut back spending on its higher-margin products.

Liquor makers such as Brown-Forman and Constellation Brands have been struggling to boost sales for their premium brands with consumers increasingly switching to affordable alternatives.

Meanwhile, high expenses of raw materials such as agave, a key ingredient for tequila, and wood barrels overshadowed the benefits from consecutive price hikes and easing costs of supply chain disruptions.

The company's quarterly gross margin fell 330 basis points to 59.4%.

Brown-Forman posted a first-quarter net income of $195 million, or 41 cents per share, compared with $231 million, or 48 cents, from a year earlier.

Analysts on average expected the company to earn 46 cents, according to LSEG data.

The company posted net sales of $951 million, missing the Wall Street estimate of $997.2 million.

Brown-Forman maintained its forecast for fiscal year 2025, anticipating a challenging operating environment due to macroeconomic and geopolitical uncertainties.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shreya Biswas)

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