Brown-Forman Corporation BF.B is slated to release first-quarter fiscal 2021 results on Sep 2. This alcoholic beverage bigwig delivered a negative earnings surprise of 3.6% in the last reported quarter. However, the company’s earnings outperformed the Zacks Consensus Estimate by 2.3%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for fiscal first-quarter earnings has been unchanged over the past 30 days at 31 cents. This suggests a decline of 20.5% from the year-ago period’s reported figure. Further, the consensus mark for revenues is pegged at $694.1 million, indicating a fall of 9.4% from the figure reported in the year-ago quarter.
Key Factors to Note
The nationwide lockdowns, stay-at-home orders, and shutdown of bars and restaurants across the major markets have been impacting Brown-Forman’s on-premise channel, which represents nearly 20% of its global business. Moreover, the Travel Retail business has been affected by travel bans and other restrictions. The disruptions in the on-premise and Travel Retail channels are likely to have affected the company’s top line in the to-be-reported quarter.
However, the company has been benefiting from strong growth in the off-premise and e-premise channels in most of the developed markets. The coronavirus outbreak-led restrictions have been resulting in a gradual shift from the on-premise channel due to a rise in at-home consumption occasions, which is contributing to accelerated growth in the off-premise channel.
Further, the company has been benefiting from impressive growth for its brands in the e-premise channel, as consumers are making fewer shopping trips. It has been quickly shifting focus and resources based on these consumer demand trends. This is likely to get reflected in underlying sales results in the United States, which is its largest market.
Moreover, it is confident of capitalizing on its American Whiskey strategy and benefitting from investments in its brand portfolio.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Brown-Forman this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Brown-Forman carries a Zacks Rank #3, its Earnings ESP of -1.61% makes surprise prediction difficult.
Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Campbell Soup Company (NYSE:CPB) CPB presently has an Earnings ESP of +1.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Constellation Brands Inc (NYSE:STZ) STZ currently has an Earnings ESP of +1.21% and a Zacks Rank #3.
Philip Morris International Inc (NYSE:PM). PM has an Earnings ESP of +0.33% and a Zacks Rank #3 at present.
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Philip Morris International Inc. (PM): Free Stock Analysis Report
Campbell Soup Company (CPB): Free Stock Analysis Report
Constellation Brands Inc (STZ): Free Stock Analysis Report
BrownForman Corporation (BF.B): Free Stock Analysis Report
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