Jack Daniel's maker Brown-Forman lowers profit forecast as tariffs bite
Aug 29 (Reuters) - Brown-Forman Corp on Wednesday said tariffs would take a 6 cent bite out of its full-year profits and the Jack Daniel's maker does not expect raising prices to immediately offset the dent.
Chief Financial Officer Jane Morreau said the alcoholic beverage maker was not going to raise prices right away to stay competitive but plans to do so later in the year.
The European Union, China, Mexico and Canada have slapped import duty ranging from 10 percent to 25 percent on U.S whiskey and Bourbon, in retaliation to U.S. tariffs on steel and aluminum in June.
The move to keep prices steady and higher costs for goods sold due to the tariffs will hit gross margins by over 2 basis points for fiscal 2019, Morreau said on a conference call, adding that it could get "a little worse" if tariffs continued for the period.
The Finlandia vodka maker now expects full-year profit in the range of $1.65 to $1.75 per share from an earlier range of $1.75 to $1.85 per share.
Shares of the Kentucky-based company were up 1 pct at $52.83 in morning trading after it also reported better-than-expected profits and sales for the first quarter. (Reporting by Jaslein Mahil and Soundarya J in Bengaluru; Editing by Shailesh Kuber)
