Jack Daniel's maker Brown-Forman (BFb.N) kept its annual forecasts unchanged on Wednesday amid tariff threats even as it missed quarterly sales and profit estimates, sending its shares up nearly 10% in early trading.
While CEO Lawson Whiting warned of "continued uncertainty and headwinds in the external environment," he said that he was confident of the company's trajectory.
For fiscal 2025, Brown-Forman expects net sales growth in the range of 2% to 4%.
The company did not specify if it was accounting for the impact from U.S. tariffs, but said the outlook was based on "currently known factors."
Brown-Forman has been reeling from a slowdown in demand so far this year, led by the U.S., Canada and Europe which offset benefits from stronger sales in emerging markets such as Mexico and Poland.
"The company's volume growth improved, so the real culprit of the top line miss was pricing," CFRA analyst Garrett Nelson said.
Meanwhile, U.S. tariffs of 25% on imports from Canada and Mexico kicked in on Tuesday, alongside the doubling of China tariffs to 20%.
Brown Forman has undertaken cost cutting measures, which analysts have said is a response to a more challenging environment both for the company and the broader spirits industry.
Last month, it announced a 12% global workforce reduction and closed its Louisville cooperage plant, measures that will save the company between $70 million to $80 million annually.
Gross margin for the quarter ended January 31 came in at 59.8% compared to 59.4% last year.
Net sales fell 3% to $1.04 billion from a year ago, compared with analysts' estimate of $1.07 billion, according to data compiled by LSEG.
On an adjusted basis, the company earned 43 cents per share, missing estimates of 46 cents.
