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Pernod Posts Sales Down 9.5% For Fiscal Year, But Sees Resilience In U.S.

September 2, 2020

Pernod Ricard’s sales declined 9.5% to €8.4 billion ($10b) in its fiscal year through June, including a 25% drop in the second half owing to the market disruptions brought on by Covid-19. Profit from recurring operations was down 13.7% to €2.3 billion ($2.7b) for the full year, after falling 46% in the second half.

In the U.S., which accounts for 20% of sales, revenues were down 4% for the year, although the company says sell-out trends remained positive, rising 2%. While closures in the on-premise affected Jameson, which was up just 2% in control states for the fiscal year, a number of brands accelerated amid the shift to the off-premise, with Glenlivet up 6%, Malibu increasing 13%, and Kahlua advancing 6%. Other key brands on the rise in NABCA channels for the year included Avion and Altos Tequilas, which jumped 28% and 23% respectively, and Jefferson’s Bourbon, which leapt by 21%. Jefferson’s was acquired along with the rest of Castle Brands for $223 million last year.

Pernod said Absolut’s U.S. performance has improved some in recent months, due to the consumer shift to “tried and trusted brands,” as well as the launch of its Absolut Juice offshoot, although the brand was still down 4% in control states for the year. Juice depleted 81,000 cases in the U.S. in just a half-year on the market in calendar 2019, according to Impact Databank. Meanwhile, Pernod said progress is ongoing for its stable of emerging brands, including Malfy, Monkey 47, Del Maguey, and Redbreast.

While the U.S. has been relatively resilient, double-digit declines in Asia, Latin America, and travel retail weighed down the company’s full-year results. Chairman and CEO Alex Ricard noted ongoing uncertainty in the market, but said Pernod plans to “accelerate our digital transformation” and “harness our agility to adjust fast to capture new opportunities” amid the changing market.—Daniel Marsteller

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