A strong dollar has caused a big hangover for Brown-Forman the spirits maker which reported net income during the second quarter that was lower despite its strong sales for Jack Daniels it flagship Tennessee Whiskey.

Sales overseas are important contributors to the overall earnings of Brown-Foreman and the headaches from currency exchange have caused the company to come up short of expectations on Wall Street for the most recently ended quarter.

Shares of the company have been down since word of the results was released on Wednesday.

Underlying net sales of the entire lineup of Jack Daniels were up by 7% during the first half of the fiscal year of the company.

Foreign Markets represented close to 60% of the overall company revenue. The strong U.S. dollar watered down the performance of the company for the three months ending October 31. Goods are less competitive overseas when the dollar is strong.

Paul Varga CEO at Brown-Forman said that the adverse currency exchange had continued hurting the results of the company, but that the underlying results over the last six months had remained strong and the company has kept its growth outlook for the full year.

Other challenges the company has face include a slowdown in the economy of some emerging markets overseas as well as intense competition with the industry itself.

For its second quarter, the spirits makers reported $200 million in net income equal to 97 cents a share. That amount was 3% less that for the same period last year of $208 million.

Wall Street analysts were expecting per share earnings of $1.00.

Net sales for the quarter were down 4% to just over $1.1 billion.

Brown-Foreman announced that is expected its earnings for the full year to be between $3.40 and $3.60 a share. The company also said it is anticipating another 5 cents a share negative impact due to foreign currency at the current rates, compared to prior forecasts for the full year.

At this time, the spirits maker is in the middle of its important holiday sales. A review of its sales for November showed strong sales to start the season, which the company said further strengthened its confidence in underlying growth.

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