Bottle left half empty at Brown Forman by weak emerging markets

Brown-Forman saw sales and profits dip at the beginning of its new fiscal year after it disposed of some of its brands and as a result of difficult comparators with 2015.

The spirits-maker saw profits after tax slip 7.7% to $144m, for earnings per share of 37 cents, with the latter unchanged in comparison to the year-ago period.

Sales at the maker of Jack Daniels declined 5.4% to reach $661m.

The company said its results were "largely as anticipated considering the absence of previously disposed brands (Southern Comfort and Tuaca) and the difficult comparisons against last year's launch of Jack Daniel's Tennessee Fire in the United States."

Company boss Paul Varga also referenced headwinds from foreign exchange and "challenging" conditions in emerging markets. Results in Turkey, Russia, Brazil, China, Thailand and several others in Eastern Europe were down, the company said in a statement.

A negative impact from FX rates cut two percentage points from top line growth and the disposal of the Southern Comfort and Tuaca brands another three points, Brown Forman said.

Analysts had penciled in revenues of $674m and quarterly EPS of 37 cents.

With a view to the full-fiscal year, Louisville, Kentucky-based Brown Forman forecast EPS in a range of between $1.71 to $1.81 (consensus: $1.77).

"While our results continue to be hampered by the combined effects of adverse foreign exchange and challenging emerging market conditions, we still expect fiscal 2017 to be another year of solid underlying sales and operating income growth, driven by the Jack Daniel's family of brands, as well as our portfolio of premium bourbons and tequilas,” Varga said.

As of 1518 BST shares in Brown-Forman were down by 3.93% to $48.35.