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Fortune Brands bounces back in Q1

An encouraging start to 2010 has led Fortune Brands to raise full-year earnings guidance as the company recovers from tough trading in 2009.

The parent company of Beam Global Spirits & Wine, the owner of Courvoisier Cognac, Maker’s Mark and Jim Beam Bourbons and Suaza Tequila, said increased demand for spirits has helped the company record a 13% rise in net sales for the three months to the end of March.

Net sales were US$1.44bn in the same period of last year, down 20% on the first quarter of 2008.

Bruce Carbonari, chairman and CEO of Fortune Brands, said the publication of full first-quarter results will show a big difference from the difficult start the company endured to 2009. “Fortune Brands is off to an excellent start in 2010,” he affirmed.

The company anticipates that underlying diluted earnings per share (EPS) are expected to be $.0.49, up 63% on the first quarter of 2009.

The company is now targeting to deliver EPS before charges/gains for 2010 in the range of $2.50 to $2.80 versus its prior target of $2.30 to $2.80.

"Each of our three brand groups performed above our expectations in the quarter as we gained share in key product categories and the consumer environment was better than anticipated," said Carbonari.

"We are holding the high end of our range because there is still uncertainty in global economies and it remains to be seen how the expiration of US Government stimulus programmes will impact home products demand.

"In addition, raw materials costs have increased, the US dollar has strengthened and, as previously indicated, we are increasing high-return strategic investment in our brands to capitalise on the improved consumer environment.”

Alan Lodge, 28.04.2010

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