Net underlying Herradura tequila sales rose 7% in the fiscal year ended April 30, 2020, reported the Brown-Forman Corporation.
Overall, its tequila portfolio increased underlying net sales by 2% as high single-digit growth in the United States was partially offset by the decline in Mexico.
For its part, Jimador tequila net sales rose 5%, while underlying net sales for New Mix decreased.
So-called underlying sales help develop a more accurate measurement of the consumer spending component of Gross Domestic Product (GDP).
For the fourth quarter, also ended April 30, the company’s reported net sales decreased 5% to $ 709 million (-10% on an underlying basis) compared to the same period last year.
Reported operating income decreased 18% to $ 187 million (-27% on an underlying basis) and diluted earnings per share decreased 20% to $ 0.27.
For the full year, the company’s reported net sales increased 1% to $ 3.4 billion (unchanged). Reported operating income decreased 5% to $ 1.1 billion (-6% on an underlying basis) and diluted earnings per share decreased 1% to $ 1.72.
It has been over a decade since Brown-Forman acquired Casa Herradura, a portfolio led by two tequila brands steeped in Mexican heritage: Herradura and El Jimador.
In fiscal year 2019, despite cost pressures resulting from the high price of agave, the company remained satisfied with the development of its tequila business in both Mexico and the United States, the brand’s two main markets.
Brown-Forman plans to continue expanding Herradura to reach new consumers in Mexico, the United States, and other high-potential markets.
In addition to the success of the brand’s core expressions, Herradura Ultra, an ultra premium «crystal clear» line extension, continued to accelerate and exceeded 90,000 nine-liter cases in fiscal year 2019.
The company intends to ensure that El Jimador tequila remains a Premium brand in Mexico by increasing prices again in fiscal 2020, and to continue to be encouraged by its long-term profitable growth prospects there.
Outside of Mexico, the company has more than quadrupled El Jimador volumes since fiscal year 2008.