The chances are high that you have indulged in a Jack & Coke or ready to drink bottled or canned cocktail while under quarantine. And you probably aren’t alone, suggests Brown-Forman (owner of Jack Daniels) President and CEO Lawson Whiting.
told Yahoo Finance’s The First Trade.
Whiting isn’t kidding about consumers having thrown a few stiff ones back at home since March.
Off-trade spirit sales for the week-ending Aug. 22 surged 26.2%, according to data from Nielsen, continuing their blistering pace from the height of the pandemic. American and Irish whiskey sales rose 27.8% and 27.6%, respectively. Tequila sales spiked 59.1%. Ready to drink cocktail sales gained 101%.
While Brown-Forman wasn’t immune from the closures of bars and reduced travel in its most recent quarter shared this week, results were padded by strong at-home alcohol consumption.
The company’s U.S. and developed international markets segments grew sales by 9% and 12%, respectively. Emerging markets sales fell 3% amid reduced travel to places like Russia. Operating profits rose 56% from the prior year. Whiskey and tequila sales improved 4% and 16%, respectively. Wine sales increased 10%.
Brown-Forman shares are up close to 10% in the wake of this week’s earnings. Shares are up 18% year-to-date versus the S&P 500’s 11% advance. Alcohol rival Constellation Brands has seen its stock rise slightly on the year, while Diageo has plunged 20%.
The next hurdle for Korbel champagne owner Brown-Forman will be the holiday quarter, which makes up close to 30% of its annual sales. Whiting is approaching the holidays with a sense of reality.
“We came out of the first [fiscal] quarter hot with pretty good sales growth. But I am still concerned about the holiday season. Without bars and restaurants, without company Christmas parties, all of that is likely to go away. I think you’ll get the home entertainment and you will likely get a lot of that. I worry a bit about what the holiday season is going to do for the spirits business. I think it’s going to be a tough one,” Whiting says.
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