Absolut Writedown Hurts Pernod’s Profits, But Company Carves Out 2% Sales GrowthAugust 27, 2015
Pernod Ricard achieved 2% organic sales growth in its recently ended fiscal year (positive currency exchange impact pushed reported sales to +8%), but its flagship Absolut vodka brand is weighing down the French drinks giant. Pernod’s net profit fell 15% to €861 million ($964m) in the 12 months ended June 30, 2015, as the company’s bottom line was hurt by the €652 million ($730m) writedown it was forced to take on struggling Absolut.
Absolut has been hit hardest in the U.S., its largest market by far. The iconic vodka brand’s sales fell by 5% in the U.S., while stronger results outside the market left its overall sales down just 1% as its global volume remained flat.
Absolut’s U.S. slide offset impressive solid gains by Jameson (sales up 18%), The Glenlivet (+11%), Malibu (+3%), Martell (+20%) and the company’s fast-rising Tequila entries—Avión (+36%) and Olmeca Altos (+101%). Pernod’s overall U.S. sales were flat, although the company was on the rise in the second half of its fiscal year, with its U.S. sales up by 3%.
Elsewhere, a strong Chinese New Year celebration buttressed Pernod’s sales in the key China market, where sales were down by just 2% following a 23% drop in the company’s previous fiscal year.
Meanwhile, Pernod continues its upswing in India (sales up 18%), where its local whisky offerings—led by Royal Stag—have enjoyed years of double-digit growth, even as the overall Indian Made Foreign Liquor (IMFL) segment has slowed down markedly of late.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
Tagged : Absolut, Jameson, Pernod Ricard, spirits
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