Pernod Sees U.S. Sales Rise 3%, But Notes Market Deceleration

Pernod Ricard’s U.S. sales grew by 3% in the nine months through March, representing the first three quarters of the company’s fiscal year. But while Pernod continues to achieve growth in the U.S., the French drinks giant noted that the market has decelerated compared with conditions during its previous fiscal year, and estimates that the pace is now about 3%-4%.

In announcing its third quarter results, Pernod said that while Absolut continues to decline in the U.S. owing to competitive pressure in the vodka category, it’s seeing strong momentum on Jameson Irish whiskey, Martell Cognac, and Tequilas Avion and Altos. According to Impact Databank, Absolut was down 3% in the U.S. in calendar 2017 to 3.8 million cases, to rank as the fifth-largest vodka brand in the market. Meanwhile, Jameson grew by 14% to 3.2 million cases, Martell rose 28% to 134,000 cases, Altos jumped 31% to 209,000 cases, and Avion grew by 4% to 120,000 cases.

Overall, Pernod’s global sales rose 6.3% to €7.1 billion ($8.8b) in the nine months through March on an organic basis, driven by the steady U.S. performance and a strong showing across a number of international markets like China, India, Travel Retail, Africa, and the Middle East. However, foreign exchange fluctuations cut into the group’s sales—especially the strengthening of the euro against the U.S. dollar—which were up only 0.2% on a reported basis. Still, Pernod confirmed its guidance of 4%-6% profit growth for its full fiscal year ending in June, and now expects earnings to come in closer to the top end of the range. —Daniel Marsteller

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