(Reuters) - Jack Daniel's maker Brown-Forman cut organic net sales forecast for fiscal 2024 on Wednesday, a sign that higher prices are weighing on the demand for its whiskey and spirits, sending its shares down nearly 5% in premarket trading.
Higher input costs of raw materials such as agave — a key input for tequila — wood and glass have forced most alcoholic beverage makers to raise product prices in the previous years to shield their margin.
Increased prices, however, prompted cost-conscious consumers to look for cheaper alternatives in the face of sticky inflation, hurting demand for Brown-Forman's spirits and premium whiskey brands.
The company said it saw lower volumes for its whiskey business, which includes Jack Daniel's Tennessee Whiskey and Jack Daniel's Tennessee Honey, so far in the fiscal year 2024.
Brown-Forman forecasts annual organic net sales to be flat, compared with its prior range of 3% to 5% growth.
The company posted net sales of $1.07 billion for the quarter ended Jan. 31, compared with analysts' average estimate of $1.12 billion, according to LSEG data.