LEXINGTON, Ky. _ Louisville-based Brown-Forman, the parent of Jack Daniel's Tennessee Whiskey, lit a fire under 2018 fiscal year earnings with a 9 percent jump in reported net sales.
For the first quarter, the company reported sales of $723 million, up $62 million. On an underlying basis, which takes into account factors such as foreign exchange rates, sales were up 6 percent.
CEO Paul Varga said the start strong represented "a nice acceleration" over last year's sales.
"We continue to foresee growth potential for our brands, most notably in American whiskey, and accordingly, we intend to invest against this opportunity with ever-improving prioritization, competitiveness, effectiveness and efficiency."
Brown-Forman reported profits of $178 million, up 24 percent over the same quarter of 2017; per diluted share, earnings were up 27 percent to 46 cents a share.
Based on the quarterly results, the company said it expects to achieve underlying net sales growth of 4-5 percent and increased the earnings outlook to $1.85 to $1.95.
Brown-Forman is set to launch both Jack Daniel's Tennessee Rye and Slane Irish Whiskey this year.
Tennessee Rye Whiskey will ship to stores in September for an October launch, Jane Morreau, Brown-Forman CFO, said in a conference call Wednesday with analysts.
Varga said the rye will be priced below $30 but above the regular black-label Jack Daniel's Tennessee Whiskey. Tennessee Rye follows the successful introduction in 2016 of Jack Daniel's Single Barrel Rye.
Varga said the rye has been five years in the making.
"One of the selling points is that it's made by the Jack Daniel's distillery," he said. "A number of competitors haven't been making their own rye. ... This is not sourced from a third party."
He said the reach of Jack Daniel's, the top-selling American whiskey worldwide, will mean a huge new market for American rye.
For example, Gentleman Jack, an upscale line extension of Jack Daniel's, isn't as popular in the United States as Woodford Reserve, the company's premium bourbon.
But overseas, riding Jack Daniel's global coattails, Gentleman Jack is the top-selling super-premium American whiskey, bigger than Woodford Reserve or even well-known competitor Maker's Mark, according to the company.
"There are a lot of Jack Daniel's drinkers who have not ventured into the rye category yet. ... I would not underestimate the potential for Jack Daniel's to globalize the rye market. We can play a very prominent role in taking American flavors around the world," Varga said. "Fingers crossed, this will be a big success for us."
Highlights of the quarter included double-digit reported sales growth for key brands in the portfolio, including the Jack Daniel's family, Woodford Reserve and Old Forester bourbons, and both tequila brands, Herradura and el Jimador.
Woodford Reserve, produced in Versailles, Ky., had a reported sales increase of 10 percent, which amounts to 16 percent growth in underlying sales.
Sales in the United States, the company's largest market, rose a reported 10 percent, driven by across-the-board gains for Jack Daniel's, including Tennessee Whiskey, Tennessee Honey, Tennessee Fire and Gentleman Jack, the company said.
