Brown-Forman Q2 Earnings Miss Estimates

Brown-Forman Corp (NYSE: BF-A) reported second-quarter FY22 sales growth of 1% year-on-year, to $994 million, missing the analyst consensus of $1.05 billion. EPS of $0.49 missed the analyst consensus of $0.52.
The gross margin expanded 30 basis points Y/Y to 59.3%. The operating margin contracted 120 basis points to 32.3%, and operating income for the quarter fell 2% to $322 million.
The company held $1.1 billion in cash and equivalents as of October 31, 2021. Cash provided by operating activities totaled $335 million with a free cash flow of $302 million.
Brown-Forman's special dividend of $480 million, or $1.00 per share, on its Class A and Class B common stock is payable on December 29, 2021, to stockholders of record on December 9, 2021.
Outlook: Brown-Forman revised the FY22 underlying net sales outlook from mid-single digit to high-single-digit growth.
It continues to expect the gross margin to be flat or slightly down for the full year.
Brown-Forman continues to anticipate that its quarterly results will be volatile for the remainder of FY22.
The company anticipates volatility and uncertainty to persist in the operating environment due to COVID-19 and supply chain disruptions.
Price Action: BF-A shares are trading lower by 4.51% at $65.41 on the last check Wednesday.

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