Jack Daniel's maker Brown-Forman posts quarterly sales beat

(Reuters) -Jack Daniel's maker Brown-Forman beat Wall Street estimates for first-quarter sales on Thursday, on the back of steady demand for its ready-to-drink beverages and spirits.

Shares of the company rose about 4% in premarket trading, having also reiterated its annual forecast.

The popularity of the company's premium-priced whiskey brands, Jack Daniel's, Old Forester and Woodford Reserve, among people with more expendable income, especially in emerging markets, helped the company offset soft demand for its spirits in the U.S. market.

However, President Donald Trump's plans to double tariffs on steel and aluminum imports to 50% could risk the margins of its canned ready-to-drink products, alongside challenges from Brown-Forman's reliance on Mexico, which made up 7% of its 2024 sales.

Brown-Forman said sales in international markets were hit in the quarter due to the absence of American-made alcohol from retail shelves in most Canadian provinces.

The company reiterated that the operating environment for fiscal year 2026 will continue to be challenging, "with low visibility due to macroeconomic and geopolitical volatility" and face "headwinds from consumer uncertainty and the potential impact from currently unknown tariffs".

Organic sales in the United States fell 2% in the quarter, compared with a 4% drop a year earlier.

Overall, organic sales, which exclude the impact of acquisitions and divestitures, was up 1%, compared with a 4% decline a year earlier.

Net sales for the quarter ended July 31 fell 3% from a year earlier to $924 million, compared with estimates of $909.2 million.

On an adjusted basis, the company earned 36 cents per share, in line with analysts estimates according to data compiled by LSEG.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Krishna Chandra Eluri)

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