BF.A Brown Forman Corp

Brown-Forman Corp., the maker of Jack Daniel's Tennessee whiskey, said its profit and sales declined in the July quarter as emerging markets continued to drag on results.

"Emerging markets did not stabilize as expected, and continued to decline during the first quarter," the company said.

Emerging market sales fell 17% because of weaker economic conditions, devalued currencies and political instability. Adjusted sales grew in Poland and Mexico, the company's two largest emerging markets, but results fell in Turkey, Russia, Brazil, China, Thailand and several markets in Eastern Europe.

For the current business year, Brown-Forman said it expected to post earnings per share of between $1.71 and $1.81.

Shares fell 1.2% to $49.75 in premarket trading.

Results also were hurt by divestitures of two liquor brands and reduced sales of a cinnamon-flavored version of its main whiskey. U.S. sales of Jack Daniel's Tennessee Fire fell in the double-digits partly because of it being compared against its off-premise rollout last year.

The Louisville, Ky., company in January said it struck a deal to sell Southern Comfort, its struggling sweet whiskey-flavored liquor, and Tuaca, an Italian liqueur, for $543.5 million to Sazerac Co. The sale was part of Brown-Forman's push to focus on Jack Daniel's and Woodford Reserve, which have grown in recent years behind a surge in American whiskey sales.

This month, the company also implemented a 2-for-1 stock split.

Sales fell 3% in the U.S. and 5% in developed international markets. Both markets posted revenue growth on an adjusted basis, because of gains in various Jack Daniel's versions, including Tennessee Whiskey, Tennessee Honey and Gentleman Jack.

In its latest quarter, the company reported a profit of $144 million, or 36 cents a share, down from $156 million, or 37 cents a share, a year prior.

Brown-Forman said sales fell 4.9% from a year earlier, to $856 million.

Analysts polled by Thomson Reuters expected sales of $841 million and per-share profit of 37 cents.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

August 31, 2016 09:55 ET (13:55 GMT)

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