Pernod Ricard first quarter sales fall less-than-expected, cautious optimism on China
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A logo is seen on a bottle of the Ricard aniseed-flavoured beverage displayed during French drinks maker Pernod Ricard news conference to announce the company annual results in Paris, France, August 29, 2018. REUTERS/Christian Hartmann
PARIS, Oct 15 (Reuters) - Pernod Ricard on Thursday reported a smaller-than- expected 0.9% drop in sales for the first quarter of its 2027 fiscal year, impacted by weak demand and de-stocking in China and the United States although demand in India was strong.
Pernod, the world's second-largest spirits maker after Diageo, said underlying trends in China were improving, confirming its cautious optimism ahead of the Chinese Mid-Autumn festival.
Pernod also reiterated a forecast for broadly stable net sales in the current fiscal year started on July 1.
• The maker of Martell cognac and Absolut vodka, which held unsuccessful merger talks with Jack Daniel's maker Brown-Forman earlier this year, reported Q1 sales of 2.234 billion euros ($2.51 billion), an organic decline of 0.9% against estimates of a 1.7% decline in a company-compiled poll of analysts.
• Sales fell 10% in the United States and 25% in China but rose 19 in India in the first quarter.
• In India the group has said it was taking preparatory steps to a potential IPO. It reiterated the decision to proceed to an IPO remains subject to board approval.
• Pernod also said it will strongly defend its organic operating margin supported by strict cost control.
• Pernod also reiterated it expects sales growth at the lower end of its 3% to 6% target range through 2029, underscoring the prolonged downturn facing global spirits makers.
• Spirits makers across the industry are grappling with a multi-year sales downturn that has eroded valuations, triggered management changes and prompted asset sales and cost-cutting.
($1 = 0.8917 euros)
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta)
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