French spirits maker Pernod Ricard has said that the coronavirus pandemic is not expected to hit its full year profit as strongly as initially feared, citing more resilient sales in U.S and Western European supermarkets and strong cost control.
Pernod Ricard, which owns Mumm champagne, Absolut vodka and Martell cognac, said it was now expecting full fiscal year 2020 profit from recurring operations to fall 15% organically, instead of the 20% forecast in March.
The group noted that its China business reported 'very limited business' in February and March, with a 'slow recovery' from April onwards, while Travel Retail saw business decline by around 80% between February and June.
This was in line with its assumptions issued in March, the group said.
However, its off-trade business showed 'more resilience' than originally anticipated. Back in March, the group said that it expected a 10% sales reduction in the off-trade from mid-March to end-June.
The rosier outlook echoed that of smaller French peer Rémy Cointreau, which said earlier this week that first-half earnings would fall less than feared as a rise in cocktail drinking at home helped offset a collapse in demand from travel retail and events in the coronavirus pandemic.