Jack Daniel’s maker Brown-Forman on Wednesday fell short of Wall Street expectations for its first quarter of fiscal 2024, plagued by lagging whiskey sales, supply challenges and a significant inventory rebuild.

There was a 1% decrease in net sales of whiskey products, led by the brands Woodford Reserve and Gentleman Jack. Jack Daniel’s Tennessee Whiskey sales were flat due to lower distributor inventories across the country, the company said.

The Kentucky-based company’s first quarter growth was affected by a difficult shipment comparison from fiscal 2023, when we rebuilt inventory impacted by prior glass supply challenges, said CEO Lawson Whiting.

There was a 8% decline in net sales in the U.S. market as a result of declining volumes.

Meanwhile, the company’s ready-to-drink and tequila categories grew.

New Mix RTD beverages delivered strong net sales growth of 52%, and el Jimador tequila had a 27% increase. A bright spot for the company was the recent acquisition of its Gin Mare and Diplomático brands.

Whiting said in a release, “We remain confident in the strength of our people, brands, and business, and we reaffirm our guidance for organic net sales growth of 5-7% and organic operating income growth of 6-8% for fiscal 2024.”

In its quarterly report, the company reported a growth of 3% over the previous quarter and reaffirmed its outlook for the full year.

During the period, the company reported net income of $231 million, or 48 cents per share, down 7% from $249 million, or 52 cents per share, during the prior-year period.

In the fourth quarter, marketing and operating costs soared, outpacing revenue growth and reducing profits.