Brown-Forman Corp topped Wall Street estimates for quarterly sales on Wednesday, benefiting from higher prices as well as steady demand for its liquor brands such as Jack Daniel's whiskey, Woodford Reserve bourbon and el Jimador tequila.
Shares of the company rose about 2% in early trading.
Spirit makers have raised prices globally as they try to protect their margins from increased costs and a stronger US dollar.
Brown-Forman's revenue rose 5% to $1.05 billion for the fourth quarter ended 30 April, beating analysts' average estimate of $990.3 million, according to Refinitiv data.
Multiple Price Hikes
However, despite multiple price hikes, the company grappled with higher expenses linked to supply chain, raw materials, and packaging, pushing its gross margin to 60.8% for the quarter, from 62.8% a year earlier.
That is in contrast to several consumer companies, including beverage makers and retailers, which are banking on lower input costs and inventories, as well as extended price hikes for a quicker-than-expected recovery in their margins.
Louisville, Kentucky-based Brown-Forman also benefited from a rebound in air and cruise travel, as well as distributors restocking its wine and spirits in markets like Germany, Australia and Mexico, following a year of supply chain disruptions.
It earned 43 cents per share for the quarter, in line with analysts' expectations.
Mirroring Rivals Results
The American bourbon whiskey maker's results mirrored those of rivals Anheuser-Busch InBev, Molson Coors Beverage Co and Constellation Brands Inc, which have reported an upbeat quarter on resilient demand for their costlier products.
Brown-Forman said it expects organic net sales to grow between 5% and 7% for the full year.
Read More: Brown-Forman Misses Quarterly Profit Estimates As Costs Weigh
News by Reuters edited by Donna Ahern, Checkout. For more drinks stories click here. Click subscribe to sign up for the Checkout print edition.
