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Brown-Forman Reiterates Fiscal 2005 Earnings Guidance

Louisville, KY, July 22, 2004 — Brown-Forman Corporation Chairman and Chief Executive Officer Owsley Brown II reaffirmed today the company’s previously stated guidance regarding fiscal 2005 earnings. Addressing shareholders at Brown-Forman’s annual meeting, Brown stated, “We believe that we will have another year of solid growth in fiscal 2005. While we are experiencing a very strong start to the fiscal year, our current earnings forecast for fiscal 2005 remains unchanged at $2.32-$2.42 per share, which represents 10-15% growth over last year. But given the strength of our leadership team, the quality of the strategies we’re pursuing, the favorable environment for our leading spirits brands, and the first quarter’s encouraging prospects, we will be striving to attain the upper end of this range.”

In discussing preliminary results for the first quarter, which ends July 31, and prospects for the entire year, Brown told shareholders the company’s leading spirits brands – Jack Daniel’s, Southern Comfort, and Finlandia – have significant momentum and excellent opportunities around the world. He said the environment for premium spirits in the U.S. continues to be very promising, and although the outlook in some international markets is more mixed, many of Brown-Forman’s most important markets, including the U.K., Australia, South Africa, and China, are doing very well.

Brown informed shareholders that while the company is expecting some improvement in operating results for both Hartmann and Lenox, the tough economic environments in which these segments operate suggest a cautious outlook for the full year. Additionally, Brown said although the company is guarded about prospects for its wine business, “We can’t fail to note the results of the May introduction of our new low carbohydrate One.6 Chardonnay and One.9 Merlot wine, as the benefits of pipeline distribution are coming through in our first quarter results.

“Putting this information together, along with noting the absence of the one-time cost of our settlement with Diageo that we recorded in last year’s first quarter, we expect our first quarter this year to be very strong,” Brown told shareholders.

At the annual meeting, Brown-Forman shareholders celebrated a record fiscal 2004 for the company, as earnings per share increased 16% to $2.11, the largest percentage gain in nine years; dividends per share were increased by more than 13%; the company paid down $150 million in debt; beverage sales grew to two billion dollars, an increase of 11%, and the company generated more than $1 billion in beverage gross profit, both records for the company. This success enabled the company to increase in global advertising investment by 15% in fiscal 2004.

“The single most important factor in our earnings last year was the exceptional growth of Jack Daniel’s,” Brown stated. “The brand passed seven million cases in depletions, which we grew at 6%, a nice increase from the 4% growth we achieved in fiscal 2003 and the 2% growth of the previous year.”

In formal action, Brown-Forman’s shareholders re-elected all 12 members of the company’s Board of Directors: Ina Brown Bond; Barry D. Bramley; George Garvin Brown III; Owsley Brown II; Donald G. Calder; Owsley Brown Frazier; Richard P. Mayer; Stephen E. O’Neil; Matthew R. Simmons; William M. Street; Dace Brown Stubbs; and Paul C. Varga. Stockholders also approved the Brown-Forman 2004 Omnibus Compensation Plan.

Brown-Forman Corporation is a diversified producer and marketer of fine quality consumer products, including Jack Daniel’s, Canadian Mist, Southern Comfort, Finlandia Vodka, Fetzer and Bolla wines, Korbel California Champagnes, Lenox, Dansk, and Gorham tableware and giftware, and Hartmann Luggage.

Important Information on Forward-Looking Statements:

This news release contains statements, estimates, or projections that constitute “forward-looking statements” as defined under U.S. federal securities laws. Generally, the words “expect,” “believe,” “intend,” “estimate,” “will,” “anticipate,” and “project,” and similar expressions identify a forward-looking statement, which speaks only as of the date the statement is made. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

We believe that the expectations and assumptions with respect to our forward-looking statements are reasonable. But by their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in some cases are out of our control. These factors could cause our actual results to differ materially from Brown-Forman’s historical experience or our present expectations or projections. Here is a non-exclusive list of such risks and uncertainties:

  • changes in general economic conditions, particularly in the United States where we earn the majority of our profits;
  • a strengthening U.S. dollar against foreign currencies, especially the British Pound;
  • reduced bar, restaurant, hotel and travel business in wake of other terrorist attacks, such as occurred on 9/11;
  • developments in the class action lawsuits filed against Brown-Forman and other spirits, beer and wine manufacturers alleging that our advertising causes illegal consumption of alcohol by those under the legal drinking age, or other attempts to limit alcohol marketing, through either litigation or regulation;
  • a dramatic change in consumer preferences, social trends or cultural trends that results in the reduced consumption of our premium spirits brands;
  • tax increases, whether at the federal or state level; ” increases in the price of grain and grapes;
  • continued depressed retail prices and margins in our wine business because of our excess wine inventories, existing grape contract obligations, and a world-wide oversupply of grapes; and
  • the effects on our Consumer Durables business of the general economy, department store business, response rates in our direct marketing business, and profitability of mall outlet operations.