Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
Brown-Forman CEO worried about tariff retaliation
Brown-Forman Corp. reported higher third-quarter sales and profit Wednesday, but shares fell 5.6 percent as CEO Paul Varga said the distiller might be an “unintended victim” of retaliation to President Donald Trump’s steel and aluminum tariffs.
Brown-Forman said its quarterly net sales, at $878 million, rose 8.7 percent, while net income, at $190 million, was up 4.4 percent. The company said the sales growth was driven primarily by higher demand for the Jack Daniel’s brand.
In a conference call with analysts, Varga said that Brown-Forman is well-positioned to take advantage of the improving global economy and rising demand for bourbon.
However, he said he also worried about foreign countries retaliating for the tariffs on aluminum and steel that Trump ordered on Thursday. Economists have told Insider that the tariffs will harm the U.S., Kentucky and Louisville economies, and European leaders have pledged retaliation on American products including bourbon.
Varga said Brown-Forman leaders were watching the developments closely and were trying to make the case in Washington, D.C., that the tariffs could catch some unsuspecting companies in the crossfire.
“The overwhelming majority of our products are made here in America and over the last few years … we’ve been investing heavily in our American manufacturing expansion,” Varga told analysts.
“If all this were to come to fruition, the irony, I feel, is that a company like Brown-Forman could be an unfortunate and unintended victim of a policy which in part is aimed at promoting something which Brown-Forman is a stellar example of: committed, long-term American manufacturing company.”
Brown-Forman sells its products in about 165 countries, Varga said.
Peyton Manning sells his Papa John’s franchise
While he will remain a brand ambassador and spokesman, Peyton Manning no longer owns Papa John’s stores in Denver, The Denver Post reported.
Manning owned 31 Papa John’s locations in Denver, but a spokesman for Papa John’s confirmed to The Denver Post that he’d sold them to an existing Papa John’s franchisee who plans to retain the staff at those stores.
“The franchisee that purchased the market is excited about the future of our business and assumed ownership of all Papa John’s locations in the Denver, Co., market on Feb. 26, 2018,” company spokesman Peter Collins told The Denver Post.
The sale was completed two days before Papa John’s announced that it would no longer be the official sponsor of the NFL. Less than a day later, Pizza Hut announced that it was the new NFL pizza sponsor.
Papa John’s relationship with the NFL hit a rough patch after founder John Schnatter blamed controversy within the NFL for Papa John’s declining sales. —Caitlin Bowling
Only one Kentuckian makes Forbes’ billionaire list
In semi-related news, Papa John’s International founder John Schnatter fell off the Forbes’ billionaire list a year after making his first appearance, leaving only one Kentuckian.
B. Wayne Hughes earned his fortune in self-storage and also owns publicly traded REIT American Homes 4 Rent, according to Forbes. Hughes is worth an estimated $2.6 billion and ranks 924 on the Forbes’ billionaire list.
As for Schnatter, whose estimated wealth was $1.1 billion in 2017, Forbes estimated his current wealth at $750 million after Schnatter blamed the NFL for his pizza chain’s declining domestic sales. After that, Papa John’s share price fell 17 percent. —Caitlin Bowling
UofL trustees narrow presidential pool to around 10
Some 10 applicants are left in the University of Louisville’s presidential search after the board of trustees reviewed 49 applications during its March 8 meeting, according to UofL spokesman John Karman.
Because it is a closed search, the exact number of applicants, their names and their backgrounds were not announced. It is also unknown if interim president Greg Postel made the cut.
Coming from a pool of 171 initial applications, the remaining finalists will have 90-minute interviews in the coming weeks, Karman said. After, the list will be reduced to three or four candidates, who will meet with a panel representing students, faculty and staff.
Home sales remain strong at the beginning of the year
It’s still very early in the year, but predictions that home sales in the state won’t slow down seem to be holding true.
Kentucky Realtors reported the second-highest number of home sales on record. The record — 3,051 homes sold — was set in January 2017, and this January was only 27 homes shy of tying the record, according to the trade group, which tracks statewide as well as regional housing data.
“Even though home sales were down slightly in the first month of the year, activity is still strong across most parts of the state and hovering at all-time highs, despite the suppressed inventory levels,” Steve Cline, president of the group, said in a statement. “This year should continue to see good movement in the market and will pick up even more if the number of homes available for sale increases, especially through new construction.”
Median home prices across the state also rose, climbing 4.6 percent, to $122,433 in January, compared to the same month in 2017. Despite increasing prices, home prices in Louisville, Northern Kentucky and Lexington are still 30 percent to 35 percent below that national average of $240,500.
In Louisville specifically, home prices increased 1.4 percent, to $162,250, and the city saw a slight increase in homes sold of 0.6 percent, to 676 houses in January 2018 compared to January 2017. —Caitlin Bowling
Local startups receive $3.3 million in funding
Venture Connectors announced its latest round of local startups that had received funding at its meeting Wednesday. Seven companies have received a total of $5.87 million in funding since the start of 2018.
The latest companies are:
- Cuddle Clones — $200,000 from angel investors
- ScheduleIt — $940,000 from angel investors
- MobileServe — $975,000 from angel investors and enterprise angels
- Virtual Peaker — $1.2 million from undisclosed sources
Edj enjoys ‘oversubscribed’ round of equity funding
EdjAnalytics said in a news release that it had closed on a $2.2 million round of equity funding, led by Chrysalis Ventures.
EdjAnalytics is a Louisville-based data science and prescriptive analytics firm focused on sports, health care, workforce and services. Chrysalis is a Louisville-based venture capital firm chaired by David Jones Jr., who is also chairman of the nonprofit Insider Media Group.
“We continue to receive incredible support from this community. Accomplishing 100 percent of the equity round through local investors is a testament to the collaboration for tech development in Louisville and the successes we’ve seen in both EdjAnalytics and EdjSports divisions,” said Sean O’Leary, the chief executive and co-founder of the company, in the release.
Leaders, entrepreneurs learn how to prepare for Gen Z
Generation Z is about to enter the workforce, and businesses need to be prepared for a shift because of it, said EY Executive Director Marcie Merriman in her opening keynote on Thursday at the Leadership Louisville Center’s 2018 Leadership Summit.
Merriman said Gen Z would be looking for three things in a workplace: intuitive processes, control and transparency. Leaders should acknowledge problems in current processes and learn to speak their language, which is fast and informal.
Gen Z is not a second wave of millennials but an entirely new generation, she said.
The group, aged 12 to 21, has never known a world without “radical connectivity,” terrorism or a black president. As a result, the group is “ambitious realists” who are driven, prepared and uber-productive, said Merriman. —Olivia Krauth
The U.S. Chamber of Commerce awarded Greater Louisville Inc., the regional chamber of commerce, with 4-Star Accreditation for its policies, organizational procedures and positive impact on the community.