Make mine whiskey
Taking a sip at Brown-Foreman
Good morning, malt mavens. This is your Stock Market Rundown for December 12th, 2023. Thanks for sharing a tipple with me today. Let’s get started:
TODAY’S TOP STORY: BARREL CHRONICLES
Could there be a more American cocktail than a Jack and Coke? Jack Daniel’s is the quintessential Tennessee whiskey, and it’s manufactured by a business whose roots go back to the presidency of Ulysses S. Grant—a man known to enjoy a wee nip himself.
That business is Brown-Forman, and its iconic booze brands include not only Jack Daniels whiskey but Finlandia vodka, El Jimador tequila, and Woodford Reserve bourbon. This is a business that’s been responsible for many an enjoyable evening, and countless devastating hangovers.
It was founded in 1870 by George Garvin Brown, who was a pharmaceutical salesman in an era where substances like quinine, laudanum, and whiskey were the best that medical science had to offer. George soon realized that the whiskey he was selling had recreational applications, too. Today, Brown’s descendants control what has become the largest distilled spirit maker in North America.
Recently, though, the brown liquors are flowing a little less freely. In its most recent earnings report, Brown-Forman cut its sales forecast for 2024, which had the stock sinking like a shot of Jägermeister dropped in a Red Bull.
Overall whiskey sales were down, with Jack Daniel’s, Woodford Reserve, and Old Forester all suffering from less swings from the jug. Management pointed to “a challenging operating environment,” as penny-pinching consumers opted for more budget-friendly brands rather than Brown-Forman’s premium offerings.
Another problem: Brown-Forman is caught up in an international spat. Starting next year, American whiskey exported to the European Union will be slapped with a 50% tariff, in retaliation for US tariffs on European steel and aluminum.
Industry experts worry that, unless a resolution can be negotiated soon, the tariffs could be “devastating to exports.” It’s clear we all have to do our part as patriots and drink as many Jack and Cokes as humanly possible. (And if your butler has the night off, just buy them premixed in a can.)
SO WHAT ELSE IS GOING ON?
Treasury Secretary Jane Yellen believes the US economy is on track for a “soft landing.” The pocket-sized bureaucrat said that with unemployment stabilizing and growth sustainable, we won’t need any dramatic monetary policy acrobatics from the Fed.
Accounting firm PricewaterhouseCoopers has to pay millions in fines to US regulators after they failed to catch employees who shared answers en masse on mandatory training courses. Cheating on an ethics test… ironic.
Subway launched its foot-long cookies as a joke, but they sold out within hours. Result: the folks at headquarters have decided to add the bountiful biscuits to the permanent menu. Never underestimate the American Eater.
Saks Fifth Avenue is rumored to be negotiating a potential acquisition of competing chain Neiman Marcus, which would consolidate power in luxury retail. It's like the high-end fashion world's version of a family reunion, except everyone's wearing Gucci and nobody's eating the potato salad.
That’s a wrap for today, comrades; I anticipate the pleasure of your company first thing tomorrow morning. Yours in capitalism, The Axe
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Hit me up at theaxe@stockmarketrundown.co