Leanne Cunningham
Senior Vice President, Chief Financial Officer at Brown-Forman
Thank you, Lawson, and good morning, everyone. As Lawson reviewed, our headlines for the quarter, I will provide additional details on our business results and our outlook for fiscal 2022. Starting with our top line; compared to fiscal 2021, our reported net sales were up 20% for the quarter. Additionally, we had strong double-digit underlying top line growth, reflecting an increase in distributor inventory levels in the United States, partially offset by the sale of Early Times, Canadian Mist and Collingwood brands during the first quarter of fiscal 2021.
The increase in distributor inventory is due to the lapping of the reduction related to the buildup in the early stages of the pandemic, which was in our first quarter of fiscal 2021, as well as a build ahead of price increases Lawson mentioned. Although, even with the increase in the quarter, we believe distributor inventory levels are still below their pre-pandemic levels due to the various supply chain challenges. From an underlying net sales growth perspective, we experienced broad-based growth across all of our geographic clusters of the United States, developed international markets and emerging markets as well as our travel retail channel.
The U.S. business, which represents half of our underlying net sales, remained strong, growing underlying net sales 16%. Jack Daniel's Tennessee Whiskey was the single largest contributor to growth, followed by our premium bourbon and tequila brands. The reopening of the on-premise, which continues to approach pre-pandemic levels as well as the Kentucky Derby's return to its same spot on the first Saturday in May, fueled volume gains. In addition, net sales benefited from continued portfolio premiumization mix and favorable channel and size mix.
In the off-premise channel, we continue to experience solid growth compared to the same period two years ago, even as the on-premise continue to reopen. The on-premise recovery accelerated during the quarter, as vaccination rates increased and restrictions were eased or removed. If you look at OpenTable trends through mid-August, they are only slightly below their pre-pandemic levels. In the e-premise channel, our market share, which is slightly above 2%, has grown 4 times since the start of the pandemic. Even as the on-premise reopens and consumers begin to return to in-store shopping, e-premise remains an important channel to consumers.
On a global basis, as this channel continues to develop, we are supporting its growth with the creation of the recently announced Integrated Marketing Communications group and we are excited about the talent joining Brown-Forman as a part of this team. Developed international markets collectively delivered strong underlying net sales growth, up double digits for the quarter, with broad-based growth across the markets. The Jack Daniel's Family of Brands experienced strong growth, driven by the reopening of the on-premise, as well as a rebound of tourism in markets such as Spain and Czechia, which supported Jack Daniel's Tennessee Whiskey double-digit volume growth.
Jack Daniel's RTDs continued to grow with higher volumes in Germany, where we continue to be a category leader. Jack Daniel's Tennessee Honey grew volume high single digits, led by gains in Korea and Czechia and collectively, the super premium brands, Gentleman Jack and Jack Daniel's Single Barrel, grew volume double digits. The newest member of the Jack Daniel's family, Jack Daniel's Tennessee Apple, continues its international rollout launching in the Netherlands, Lithuania, Hungary, Slovakia and Italy and is off to a strong start in those markets.
Collectively, our emerging markets continue to rebound with very strong double-digit underlying net sales growth, driven by strong underlying growth from Jack Daniel's Tennessee Whiskey, particularly in Turkey, Brazil and Chile. Jack Daniel's Flavors more than doubled in both Chile and Brazil as we benefit from the launch of Jack Daniel's Tennessee Apple, while Herradura grew triple digits in Mexico, as Q1 volumes surpassed pre-pandemic levels. Finally, as expected, our Travel Retail business experienced a strong rebound, though volumes remain below their pre-pandemic levels, as international airline travel and the cruise business have yet to fully recover.
Lawson shared the details on our gross margins, so I will now turn to our operating expenses. Similar to the fourth quarter of last fiscal year and as expected, we significantly increased our A&P spend, which grew over 40% on both a reported and underlying basis. We continue to support the momentum behind our iconic brands by investing in world-class advertising to drive our sales. In the first quarter, we did lap the impacts of the early stages of the pandemic, where on-premise activations were canceled, consumer events such as The Kentucky Derby, summer festivals and sponsorships were rescheduled or canceled, and in the month of July last year, we paused on certain social media platforms.
From an absolute dollar perspective, our level of investment in Q1 more closely reflects the normal seasonalization of our spend. Our underlying SG&A investment increased double digits, driven by the timing of compensation-related expenses, non-income tax items and the cycling of lower discretionary spend during the same period last year due to the impacts related to the COVID-19 pandemic. In total, we grew underlying operating income 15% for the first quarter. On a reported basis, operating income declined 25%, due to the sale of Early Times, Canadian Mist and Collingwood brands last year. This, combined with an increase in our effective tax rate, resulted in a 41% diluted EPS decrease of $0.40 per share.
And finally, to our fiscal 2022 outlook; even with the volatility and resurgence of COVID-19, we remain confident in our top line growth momentum. We believe our portfolio is well-positioned to capitalize on, the reopening of the on-premise channel, the recovery of countries heavily reliant on tourism, some degree of business and personal travel resuming and the growing premiumization trends. In aggregate, we expect strong growth in our emerging markets as well as Travel Retail, which will cycle the effect of easy comparisons, as they begin to stabilize and recover. Further, we do not expect the non-core business mainly used barrel sales, to have a material impact on our business this fiscal year.
Turning to gross margins, currently, we are managing through the impact of global supply chain disruptions, including glass supply and challenging cost headwinds. Similar to others, we are experiencing greater-than-expected logistics cost, higher input costs on items such as grain and aluminum, agave costs that are below their peak and stable, though, easing at a slower pace than previously forecasted, due to higher demand within the category. In addition, with the rebound and recovery of our markets and channels, coupled with strong consumer demand for our brands, we are currently managing through glass supply constraints.
We have deployed a number of risk mitigation strategies and are working actively with our suppliers and distributor partners to optimize our supply chain to meet the consumer demand. While we expect these disruptions to persist throughout the fiscal year, we believe that the impact will become less significant in the second half of the year. As a result of these factors, we now expect our gross margin to be flat or slightly down for the fiscal year versus the slight improvement we originally anticipated.
We expect our operating investments, advertising and SG&A to be in the mid-single-digit range, as we continue to invest behind our brands to support top line growth, and progress various strategic initiatives, including three new RTCs, the expansion of our emerging brands team in select international markets, focused on growing our super-premium portfolio, and increasing our digital marketing and e-commerce capabilities. Similar to last fiscal year, we do expect the seasonality of our results to be volatile during the year, particularly in operating income.
Despite these challenges and excluding any potential impact from changes in tariffs, we continue to expect both our underlying net sales and underlying operating income to grow in the mid-single-digit range. Lastly, we expect our fiscal 2022 effective tax rate to be in the range of 22% to 23%. In summary, and as Lawson stated, we have had a strong start to fiscal 2022. While uncertainty and volatility will likely continue to be a significant part of our business environment this year, our brands are strong, our top line has momentum. And we remain-well positioned with a strong balance sheet and cash flows.
This concludes our prepared remarks. Please open the line for questions.