Pernod Ricard Banks On China, US To Power Return To Sales Growth
Pernod Ricard has forecast a return to organic sales growth in the full year, after a strong performance in its key U.S. and Chinese markets helped the French spirits group beat estimates for first-half profit and sales.
Double-digit sales growth in China and a 5% sales rise in the United States propped up results for Pernod, the world's second-biggest spirits group after Diageo, as stuck-at-home consumers splurged on its Jameson Irish whiskey and Martell cognac.
Still, Pernod flagged continued uncertainty and volatility as the COVID-19 crisis weighed on duty-free sales and alcohol consumption in bars and restaurants.
“We are particularly encouraged by our must-win domestic markets returning to growth in H1 FY21. The first half confirms the long-term sustainability and underlying strength of our business," commented chief executive Alexandre Ricard.
"Despite an uncertain and volatile environment, with disruption in the On-trade and a prolonged downturn in Travel Retail, we anticipate organic sales growth for full-year FY21, thanks in particular to our dynamic performance in domestic Must-win markets USA, China and India."
Pernod, whose fiscal year starts on July 1, said profit from current operations in the six months to Dec. 31 reached €1.595 billion, an organic decline of 2.4% that was still better than analysts' expectations for a 7.9% fall.
Sales reached €4.985 billion, representing an organic decline of 3.9%, compared with analysts' expectations for a 5.4% drop.
"We will continue to implement our strategy, in particular accelerating our digital transformation, while dynamically managing resources," Ricard added. "Thanks to our solid fundamentals, our teams and our brand portfolio, I am confident that Pernod Ricard will emerge from this crisis stronger."
Last month, smaller French peer Rémy Cointreau beat third-quarter sales forecasts and said it was confident that demand for its premium cognac in China and the United States would fuel a profit recovery this year.