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Why Drink the Cheap Stuff if the World Seems to be Ending?

Published 2020-09-02, 12:01 p/m
© Reuters.
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By Christiana Sciaudone

Investing.com -- With the end of the world seemingly nigh, we're not wasting time on the cheap stuff. 

Premium bourbon sales grew 18% at Brown Forman (NYSE:BFb), helping the company beat sales estimates for the pandemic-constrained fiscal first quarter. 

Shares of the booze maker rose 11% on the news. 

The award-winning Woodford Reserve's revenue jumped 14%. A fifth of the whiskey sells for $28.98 at Walmart (NYSE:WMT) versus Jack Daniel's -- also a Brown Forman brand -- which is going for $14.98.

Tequila sales also saw a nice bump, up 16% thanks to New Mix -- a canned beverage -- sales in Mexico and bottles of el Jimador. 

Investment in advertising at Brown Forman declined 34% for the quarter because Covid-19 provided plenty of free press. Canceled consumer events and sponsorships also helped save money. 

"We believe that we continue to be in a strong financial position and that our capacity to generate solid operating cash flows remain sound, allowing us to navigate this pandemic as circumstances evolve,” said Chief Financial Officer Jane Morreau. The company maintains expectations to fully fund ongoing investments and pay regular dividends.  



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