Pernod Ricard Sees 6% U.S. Sales Increase In Fiscal First QuarterOctober 17, 2019
A strong fiscal first quarter in the U.S. offset slower growth in Asia for Pernod Ricard, which posted global sales up 1.3% to €2.5 billion ($2.8b) in the three months through September. Despite uncertain economic conditions and global trade disputes, Pernod confirmed that it’s targeting operating profit growth of 5%-7% for its full fiscal year ending next June.
In the U.S., Pernod’s sales climbed 6%, boosted by advance shipments as distributors stocked up ahead of the holiday season. The company said that its underlying sales trend is closer to 4%, with growth continuing to be driven by Jameson, whose higher-priced Black Barrel expression has been gaining traction. Jameson unveiled two new offerings under its Caskmates extension in recent weeks.
Pernod added that The Glenlivet single malt Scotch is also continuing to rise in the U.S., bolstered by its Founders Reserve offering and the recent launch of a Cognac cask-finished 14-year-old retailing at $55. The Glenlivet is the top single malt in the U.S., with about a 25% share of the market, according to Impact Databank. Single malt is confronting a new challenge in the form of a 25% tariff in the U.S., however, set to take effect tomorrow. Pernod chairman and CEO Alex Ricard told Reuters the move will have a significant impact on the company’s U.S. business and could result in price increases.
Elsewhere, Pernod noted that while its Malibu and Kahlua brands enjoyed growth in the U.S. in the first quarter, Absolut continues to decline, despite a “promising launch” for its new Absolut Juice offshoot. The company also augmented its portfolio recently with the $223 million acquisition of Castle Brands, including the Jefferson’s Bourbon label.
The solid results in the U.S. helped offset a deceleration in Asian markets, as Pernod blamed a softer on-premise environment in China for slowing its growth rate to 6% in the market this quarter compared with 27% a year ago. Likewise, softer macroeconomic conditions in India led that market to decelerate from 34% last year to 3% in the three months through September.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.