Pernod’s Sales Decline 14.5% In Third Quarter, As Covid-19 Takes Toll

Pernod Ricard posted sales down 2.1% on an organic basis to €7.2 billion ($7.8b) in the nine months through March, representing the first three quarters of its fiscal year, weighed down by a 14.5% decline in the third quarter owing to the unprecedented conditions brought on by Covid-19.

Pernod’s U.S. business managed a 3% sales increase in the first nine months of the fiscal year, but saw slowing growth in March due to physical distancing and other containment measures, including the on-premise shutdown. Jameson, which was up 6.5% to 3.7 million cases in the U.S. last year, according to Impact Databank, was affected by the cancellation of St. Patrick’s Day events, but continued to perform well off-premise, the company said. Jameson grew by 22% in IRI channels in the 12 weeks through March 23, and by 3% in control states in the year-to-date through March. Larger-format sizes of core brands like Jameson, Absolut, and Malibu have been leading the way in the off-premise, Pernod noted.

The third-quarter decline was mainly linked to a steep drop in China, where sales fell 11% in the nine-month period, and travel retail, which was down 13%. Pernod says China is now in the midst of a slow recovery, with outlets gradually reopening but physical distancing still impacting consumer traffic. Pernod Ricard chairman and CEO Alex Ricard said the company got off to a good a start in calendar 2020, but “Since then, the Covid-19 pandemic has led to a significant deterioration of the environment across the globe.” He added that the company is “implementing a comprehensive action plan to mitigate costs and tightly manage cash.” For its full fiscal year ending in June, Pernod reiterated its earlier guidance of a roughly 20% drop in profit from recurring operations.—Daniel Marsteller

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