Yahoo Finance Facts to Know About Brown-Forman (BF.B) Before Q4 Earnings
Brown-Forman Corporation (BF.B) is slated to release fourth-quarter fiscal 2024 results on Jun 5. The alcoholic beverage bigwig’s revenues and earnings are expected to have declined in the to-be-reported quarter. The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $1.03 billion, indicating a decline of 1.8% from that reported in the year-ago quarter.
The consensus mark for the to-be-reported quarter’s earnings is pegged at 42 cents per share, suggesting a decline of 2.3% from the year-ago period’s reported number. Earnings estimates for the fiscal fourth quarter have been unchanged in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 7.1%. In the trailing four quarters, BF.B delivered a negative earnings surprise of 1.3%, 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 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.
BF.B has been witnessing increased demand for its brands, and growth across all geographic clusters and the Travel Retail channel. This has been driving organic sales growth.
The company is likely to have witnessed continued growth across brands and categories in the fiscal fourth 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 fourth 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.
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.
Brown-Forman has been witnessing higher input costs due to continued inflation in prices for agave, wood and grain. Higher input costs for these commodities have been hurting the gross margin. Going ahead, the company expects inflation to continue to negatively impact its input costs.
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 lowered its organic sales growth for fiscal 2024 on the persistent challenging operating environment. It anticipates organic sales for fiscal 2024 to be flat year over year mainly due to slower-than-expected sales growth in the first nine months of fiscal 2024. Brown-Forman expects the organic operating income between flat and up 2%, mainly based on its revised expectations for organic sales and projections for an improved gross margin.
For fiscal 2024, the company's operating expense outlook indicates normalization of the incremental advertising spending, in sync with its long-term philosophy of aligning advertising spend with its top-line growth. Moreover, the company expects SG&A expense growth to remain higher than historical averages due to expectations of higher compensation-related expenses and expenses related to the transition to own distribution in Japan.
Our model predicts a gross margin of 61.8% for the fiscal fourth quarter, suggesting a 110-bps expansion from the year-ago quarter’s actual. We expect advertising expenses to increase 3.4% year over year to $138.6 million in the fiscal fourth quarter, along with a 5.1% increase in selling, general and administrative expenses. Our model estimates SG&A expenses to increase 3.4% year over year, with a 60-bps rise in the SG&A expense rate.
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 0.00% and a Zacks Rank #4 (Sell) at present.
Stocks With Favorable Combinations
Here are some companies that 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 currently has an Earnings ESP of +1.80% and a Zacks Rank #3. The company is anticipated to register top and bottom-line growth in first-quarter fiscal 2024. The Zacks Consensus Estimate for OLLI’s quarterly revenues is pegged at $505.8 million, suggesting growth of 10.2% 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 65 cents per share, suggesting 32.7% growth from the year-ago quarter's reported number. OLLI delivered an earnings surprise of 7.3%, on average, in the trailing four quarters.
The J. M. Smucker Co. SJM currently has an Earnings ESP of +0.44% and a Zacks Rank #3. The company is expected to register top-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for SJM’s quarterly earnings has moved down by a penny in the past seven days to $2.32 per share, suggesting a decline of 12.1% from the year-ago quarter's reported number.
The Zacks Consensus Estimate for J. M. Smucker’s quarterly revenues is pegged at $2.25 billion, which indicates growth of 0.5% from the figure reported in the prior-year quarter. SJM delivered an earnings surprise of 7.5%, on average, in the trailing four quarters.
General Mills GIS currently has an Earnings ESP of +0.56% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for GIS’s quarterly revenues is pegged at $4.9 billion, which suggests a decline of 2.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for General Mills’ bottom line has moved down by a penny in the past seven days to 99 cents per share, which implies a decline of 11.6% from the figure reported in the prior-year quarter. GIS has delivered an earnings surprise of 7.2%, on average, in the trailing four quarters.
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Brown-Forman Corporation (BF.B) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
