Earnings Highlights and Review: Brown-Forman Reported Q4 and Annual Results for FY17
Research Desk Line-up: Castle Brands Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 27, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Brown-Forman Corp. (NYSE: BF-A) (NYSE: BF-B), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=BF-A, following the Company's release of its fourth quarter fiscal 2017 (Q4 FY17) and full year 2017 (FY17) earnings on June 07, 2017. The Louisville, Kentucky-based Company's net sales fell 5% y-o-y; however, on an underlying basis, net sales were up by 4% y-o-y. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Beverages - Wineries & Distillers industry. Pro-TD has currently selected Castle Brands Inc. (NYSE MKT: ROX) for due-diligence and potential coverage as the Company reported on June 14, 2017, its financial results for Q4 and fiscal year which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on Castle Brands when we publish it.
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Earnings Reviewed
During the Q4 FY17, Brown-Forman's reported net sales of $694 million compared to $729 million in Q4 FY16. Net sales number for Q4 FY17 came in below market expectations of $736 million.
The producer and distributor of premium alcoholic beverages reported net income of $144 million, $0.37 per diluted share, in Q4 FY17 compared to $522 million, or $1.30 per diluted share, in the prior year's comparable quarter. The Company posted non-GAAP net income of $0.38 per diluted share in Q4 FY17 versus $0.40 per diluted share in Q4 FY16. Meanwhile, Wall Street had expected the Company to report non-GAAP net income of $0.40 per diluted share.
For full year FY17, Brown-Forman's net sales came in at $3.86 billion compared to $4.01 billion in FY16. The Company posted net income of $669 million, or $1.71 per diluted share, in FY17 compared to $1.07 billion, or $2.61 per diluted share, in FY16. Meanwhile, non-GAAP net income increased to $1.72 per diluted share in Q4 FY17 from $1.63 per diluted share in FY16.
Operating Metrics
The Company's Q4 FY17 gross profit was $480 million compared to $513 million in the previous year's same quarter. Gross margin as a percentage of net sales for Q4 FY17 fell to 69.1% from 70.3% in Q4 FY16. In Q4 FY17, advertising expenses were $91 million, down from $101 million reported in the year ago same quarter. The Company spent $179 million on selling, general, and administrative expenses in the reported quarter versus $181 million spent in the year ago comparable quarter. Furthermore, operating income declined during Q4 FY17 to $212 million, or 30.5% of net sales, from $726 million, or 99.5% of net sales, in Q4 FY16.
Balance Sheet
For the full-year FY17, the Company's cash provided by operating activities was $639 million, up from $524 million in the previous year's comparable period. As on April 30, 2017, the Company had cash and cash equivalents balance of $182 million versus $263 million as on April 30, 2016. Additionally, the Company had reported long-term debt of $1.69 billion in its books of accounts as on April 30, 2017, compared to $1.23 billion as on April 30, 2016.
Dividend and Share Repurchases
In a separate press release on May 24, 2017, Brown-Forman's Board of Directors declared a regular quarterly cash dividend of $0.1825 per share on its Class A and Class B common stock. The cash dividend is payable on July 03, 2017, to stockholders of record on June 05, 2017. Furthermore, the Company had made dividend payment in 71 consecutive years and has increased the dividend for 33 consecutive years.
During full year FY17, Brown-Forman's repurchased 11.9 million Class A and Class B shares for $561 million at an average price of $47 per share.
Earnings Outlook
In its guidance for full year FY18, Brown-Forman's management anticipates underlying net sales growth in the range of 4% to 5%. Underlying operating income growth is forecasted to be in the range of 6% to 8%. Furthermore, diluted earnings for FY18 are expected to be between $1.80 and $1.90 per share.
Stock Performance
Brown-Forman's share price finished yesterday's trading session at $49.75, sliding 1.35%. A total volume of 33.70 thousand shares have exchanged hands, which was higher than the 3-month average volume of 28.45 thousand shares. The Company's stock price advanced 4.78% in the last three months and 6.44% in the past six months. Additionally, the stock gained 7.57% since the start of the year. Shares of the Company have a PE ratio of 29.09 and have a dividend yield of 1.47%. The stock currently has a market cap of $8.41 billion.
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