Pernod Ricard’s sales soar in first quarter

French drinks group Pernod Ricard has hailed a “particularly good start” to its fiscal year after first quarter organic sales jumped 10.4%.

Jameson maker Pernod Ricard has reported a stellar start to its fiscal year

Sales hit €2.387 billion (US$2.75bn) in the quarter, but reported growth was slower – at 7.2% – due to unfavourable exchange rate movements of the Indian rupee and Turkish lira.

Pernod Ricard, the world’s second largest spirits firm, confirmed that its estimated profit growth for the full fiscal year is between 5% and 7% due to an “uncertain geopolitical and monetary environment”, according to CEO Alexandre Ricard.

In the three months to 30 September 2018, organic sales for Pernod’s Asia and rest of the world region shot up 23% thanks to “better market conditions” in India and “strong growth across all categories” in China.

Asia travel retail and Africa Middle East also proved “strong”, but “difficulties” remain in Korea.

Growth was much more subdued in Europe and the Americas, where sales increased by 1% and 2% respectively. In Europe, France and Spain declined, while the group continues to face difficulties in the US – but its performance here “remains broadly in line with the market”.

Pernod’s portfolio of ‘strategic international brands’ grew sales by 12%, but Absolut – the world’s second best-selling vodka brand ­– declined “due to phasing in the US”.

The firm’s ‘strategic local brands’ – notably Seagram’s Indian whiskies, Ararat brandy, Passport Scotch and the Olmeca and Altos Tequilas – accelerated growth, with the portfolio posting a sales increase of 15%.

Pernod’s half-year results are expected to benefit from the earlier Chinese New Year (5 February).

The group also confirmed that “in the short or medium term” it may consider making bolt-on acquisitions or divestments of non-strategic brands.