Q1 Pernod Ricard sales exceed expectations due to strong demand in China and US
- Q1 revenue 2.72 billion euros, up 20% lfl vs. est. 15.7%
- China sales up 22%, US sales up 9%
- Expects good sales growth throughout the year, although moderating compared to the first quarter
PARIS, Oct.21 (Reuters) – French spirits maker Pernod Ricard (PERP.PA) has said it expects good sales growth to continue through its 2022 fiscal year, although it could moderate a touch, after strong demand in China, the United States and India helped it achieve 20% better than expected growth in the first quarter.
Pernod, the world’s second-largest spirits group behind Diageo (DGE.L), said consumption by people staying at home remained resilient, while reopening bars and restaurants also provided support. Travel retail remained sluggish even though the company benefited from a weak comparison basis during the quarter.
Pernod Ricard’s financial year began on July 1.
“We are giving a qualitative orientation. We are confident but we have to get through Christmas and the Chinese New Year (to have more visibility),” Chief Executive Officer Alexandre Ricard told Reuters, when asked about his ‘he was comfortable with the mean. Analysts are forecasting sales growth of 9.7% for the full year.
Pernod expects “the good sales growth to continue throughout the year,” he said. It benefited in the first quarter from a weak basis of comparison compared to the previous year, which would become progressively less favorable, added Ricard.
Despite the strong growth in sales, the Pernod share lost 0.8% to 197.30 euros.
For the first quarter ended September 30, Pernod – which owns Martell cognac, Mumm champagne and Absolut vodka – reported sales of 2.718 billion euros ($ 3.17 billion), an increase 20% like-for-like. The market was expecting sales to increase by 15.7%.
The good start to the year resulted in a 9% increase in sales in the United States, Pernod Ricard’s main market, with good replenishment before the end of the year holidays and a rebound in demand from Jameson Irish whiskey as bars and restaurants reopened after COVID restrictions eased.
In China, sales jumped 22%, driven by demand during the Mid-Autumn Festival and rising prices for Martell cognac.
“The Mid-Autumn Festival went well and our inventory level is healthy,” said Ricard.
China contributes around 9% of Pernod’s sales and is its second largest market.
Global travel retail sales are up 55% year-on-year, returning to growth in all regions and benefiting from a very favorable basis of comparison.
($ 1 = € 0.8583)
Reporting by Dominique Vidalon; Editing by Subhranshu Sahu and Christopher Cushing
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