Salem Radio Network News Wednesday, May 18, 2022

Business

Pernod Ricard eyes 17% annual profit growth after Q3 sales beat

By Dominique Vidalon

PARIS (Reuters) -French spirits group Pernod Ricard said on Thursday strong demand in its key U.S., Chinese and European markets drove a 20% jump in third-quarter organic sales, beating analysts’ forecasts by a strong margin.

Pernod Ricard, which owns Mumm champagne, Absolut vodka and Martell cognac, however, said it expects softer sales in the fourth quarter due to COVID-19 disruptions in China, gradual normalisation in U.S. business and the Ukraine conflict.

Despite an increasingly challenging environment, Pernod Ricard forecast organic growth of 17% in profit from recurring operations for its financial year ending June 30, in line with current market consensus for 16.9% growth.

Resilient consumption by people staying at home, the reopening of bars and restaurants and a continuing recovery in travel retail would fuel strong full-year sales growth across regions, with some operating margin expansion, it added.

Pernod, the world’s second-biggest spirits group after Diageo, reported sales of 2.447 billion euros ($2.57 billion) in the three months ended March 31 – up 20% on a like-for-like basis, beating analysts’ expectations of 14.3% growth.

This reflected a 20% rise in sales in Europe despite some deceleration in March notably due to the impact of the Ukraine conflict, it said.

In the United States, sales rose 23% in the quarter, lifted by solid demand for Jameson whiskey, Malibu, Kahlua liquors and Martell cognac. Broad-based price increases in early February and innovations such as Jameson Orange also helped U.S. sales.

In China, sales in the third quarter grew 8%, slowing from 14% in the first half of the year, with a softer Chinese New Year performance affected by COVID disruptions.

Pernod Ricard’s fiscal year starts on July 1.

($1 = 0.9507 euros)

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Sherry Jacob-Phillips)

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