By Martinne Geller
May 2 A public relations disaster pumped up Beam
Inc's first-quarter profit.
Sales of Maker's Mark soared 44 percent after the company
announced it would lower the alcohol content in its bourbon
because of a limited supply of whiskey.
A consumer outcry led Beam to quickly reverse that decision,
but not before die-hard fans stocked up.
"As you know, we heard our consumers loud and clear,
responded quickly and maintained Maker's at 90 proof," said Beam
Chief Executive Matt Shattock.
He said that kind of growth was not sustainable and that
Beam would control the supply of Maker's by managing bottle
sizes, prices and promotions.
Maker's, one of several higher-end bourbons in the Beam
portfolio, is made in Loretto, Kentucky, with red winter wheat
meant to stimulate taste buds in the front of the mouth.
Beam on Thursday said net income rose to $114.5 million, or
71 cents per share, in the first quarter, from $79.1 million, or
49 cents per share, a year earlier.
Excluding items, Beam earned 64 cents per share, or 10 cents
per share more than analysts were expecting on average,
according to Thomson Reuters I/B/E/S.
Sales rose 8 percent to $577.7 million, as the strength in
Maker's Mark was partially offset by declines in Sauza tequila,
Courvoisier cognac and Kilbeggan Irish whiskey.
Still, Beam stood by its full-year outlook, saying that some
of the factors that helped results earlier in the year will
reverse themselves later.
The company said it had benefited from the timing of
ingredient costs, selling a higher proportion of more-expensive
products, price increases and a shift in advertising spending to
the second and third quarters from the first quarter.
The company affirmed its full-year forecast, which called
for earnings before one-time items to grow at a high
single-digit percentage rate from the $2.40 per share it earned
in 2012. It said it still expected 2013 free cash flow of $300
million to $350 million.
Beam shares ended regular trading on Thursday up $1.82, or
2.8 percent, at $66.11.