Brown Forman Inc. shares are trading higher on Thursday after the company reported better-than-expected second-quarter financial results.

The company reported second-quarter earnings per share of 55 cents, beating the street view of 51 cents.

Quarterly sales of $1.095 billion (down 1% year-over-year) beat the analyst consensus estimate of $1.076 billion. Sales rose 3% on an organic basis.

Net sales declines in the year’s first half were primarily due to the Finlandia and Sonoma-Cutrer divestitures.

Operating income rose 1% to $341 million in the second quarter. Gross profit slumped 4% year over year to $646 million.

In the first half of the year, gross profit declined 8% (-4 % organic) primarily due to the Finlandia and Sonoma-Cutrer divestitures. Gross margin contracted 240 basis points, largely due to the timing of input cost fluctuations coupled with high inventory levels, partially offset by favorable price/mix.

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On November 22, the Brown-Forman Board of Directors approved a 4% increase in the quarterly cash dividend to $0.2265 per share on its Class A and Class B common stock. The dividend is payable on January 2, 2025, to stockholders of record on December 6.

Outlook: Brown-Forman’s FY25 outlook includes organic net sales growth and organic operating income growth in the 2% to 4% range.

The effective tax rate is expected to be between 21% and 23%, and the estimated capital expenditure range has been updated to $180 million to $190 million, down from $195 million to $205 million.

Price Action: BF.B shares are trading higher by 9.09% to $44.73 at the last check on Thursday.

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