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Pernod Returns To Sales Growth In Q1, Despite Slower U.S. Progress

October 23, 2014

After a flat sales performance in its full fiscal year through June, Pernod Ricard returned to revenue growth in the three months through September, its fiscal first quarter, with sales up 2% organically to €2.04 billion ($2.58b). Pernod saw improving conditions in China (sales down 9%, versus a 38% decline in the previous quarter), where it’s wooing consumers with less expensive varieties of Martell Cognac. The company also continued its surge in India, where sales rose 21%. Brazil also posted a double-digit increase for the French drinks giant.

The U.S. market proved tougher for Pernod, however, with sales down 3%, owing to shipment phasing and cutthroat pricing conditions in the vodka market, which led to a low single-digit decline for Absolut, even as Jameson, Malibu and The Glenlivet continued to prosper. Still, Pernod said U.S. underlying growth was positive, running in the low single digits in Nielsen and NABCA channels. The company’s Europe business—accounting for more than one-third of sales—was down 1%.

“For the full financial year we anticipate a gradual improvement in sales, in an environment that will remain difficult,” said deputy CEO Alexandre Ricard, who will take over as chief executive for the retiring Pierre Pringuet next year. “We plan to increase investment behind our priority brands and innovations. As a result, our 2014-15 guidance is organic growth in profit from recurring operations between +1% and +3%.”

 

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