Pernod Ricard exceeds Q1 forecast as China picks up

French drinks producer Pernod Ricard has reported a stronger than expected performance for the first quarter, with organic sales rising by 5.7% driven by accelerating demand in China and the US.

For the first quarter ended September 30 Pernod Ricard, which owns Irish Distillers, reported sales for the first quarter of €2.29 billion, representing organic growth of 5.7% – above analysts’ estimates of 3.4%.

This growth was driven by “significant acceleration” of sales in Asia-RoW. Compared with the same period last year, sales in this region increased by 7%, with a strong Q1 in China and a rebound in Travel Retail and Africa Middle East. 

In China, sales rose 15% in the quarter as growth accelerated in all product categories and notably demand for Martell Cognac. Chivas whisky also returned to growth.

In the Americas, sales increased by 6%, with “good performance” in USA and acceleration of Travel Retail channels throughout the continent.

In the US, sales rose 4%, driven by double-digit growth for Jameson whiskey, however Absolut vodka was still in decline in a competitive environment. Globally, Absolut volumes are are back to positive figures with a +2% growth over the last fiscal year, +6% outside the US.

The company also reported on “good overall growth” in Europe, which sale sales rise by 3%, which it attributed to “very strong” sales in Eastern Europe and a “modest” increase in Western Europe.

Germany and the UK performed well, offsetting a decline in France and a slow start in Spain.

In terms of its brands, the producer’s Strategic Local Brands grew +2% with Seagram’s Indian whiskies growth still subdued due to the highway ban but strong growth in tequila and gin.

Group top line improvement was primarily driven by the Strategic International Brands (+8%) with strong broad-based growth, in particular from Martell, Absolut, Jameson, Ballantine’s, Chivas and Malibu.

Its strategic wine brands also had a very strong quarter at +8%, thanks mainly to its Campo Viejo brand.

“We have had a very good start to the year, with our growth accelerating and diversifying in terms of both markets and brands,” said Alexandre Ricard, chairman and chief executive officer.

“This is again testimony to the success of the strategic direction we adopted 2 years ago. In an environment that remains uncertain, we confirm our FY18 guidance of organic growth in Profit from Recurring Operations of between +3% and +5%. We will continue to implement our roadmap, in particular focusing on digital, innovation and operational excellence.”

Looking ahead, the producer forecast organic growth of between 3 and 5% for the full year to 2018, however cautioned that as the Chinese New Year was due on February 16, 2018, three weeks later than in 2017, this would negatively impact its second quarter.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales Manager

James Eadie Ltd
London, UK

Wine Ambassador Role

Ramón Bilbao UK
London, UK

Fine Wine Logistics Coordinator

IG Wines
London, UK

Sales Manager

Top Selection
London, UK

Assistant Retail Manager

The Whisky Exchange
London, UK

Marketing Manager

Ellis Wines
Hanworth, Middx, GB

Commercial Analyst

ATOM Group
Tunbridge Wells, UK

Customer Service Executive

Marussia Beverages
Marylebone, London, UK

HR Administrator

Amathus Drinks PLC
London, UK

Trade Marketing Manager

Australian Vintage Limited
Croydon, UK

The World Bulk Wine Exhibition

Amsterdam,Netherlands
20th Nov 2017

The Drinks Business Green Awards 2017

London,United Kingdom
20th Nov 2017

The Global Spirits Masters Lunch

London,United Kingdom
1st Dec 2017
Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more