Pernod Ricard reports ‘moderate’ Q1 sales

French drinks group Pernod Ricard has reported a “moderate” organic sales growth of 1.3% for the first quarter of fiscal 2020, boosted by the US and China.

Pernod Ricard’s Q1 results were boosted by the US market

During the quarter, sales hit €2.438 billion (US$2.7bn), which were “in line with expectations” after a “very high basis of comparison” during Q1 2019 when sales grew 10.4%.

Pernod Ricard, the owner of Absolut vodka and Jameson Irish whiskey, confirmed its estimated profit growth for the full fiscal year was between 5% and 7% due to an “environment that remains particularly uncertain”, according to CEO Alexandre Ricard.

In the three months to 30 September 2019, organic sales for the US were up 6% due to innovation and advanced shipments. The star performer for the region was Jameson, which witnessed “strong growth with dynamic development of Black Barrel”.

In the US, Malibu rum liqueur and Kahlua liqueur witnessed “solid growth”, while Absolut continued to decline despite the “promising launch” of flavoured range Absolut Juice.

China reported an organic sales increase of 6% boosted by Martell Cognac, however Chivas blended Scotch whisky declined due to a “challenging on-trade environment”.

India grew sales by 3% boosted by the “dynamic growth” of Imperial Blue Indian whisky.

Europe witnessed “good growth” (3%) thanks to Eastern Europe and the “return to growth” in Western Europe.

The global travel retail market saw its sales drop 6% due primarily to “high basis of comparison and promotional phasing in Europe”.

Brand performance

The group’s strategic international brands were up 3% with “moderate” growth, thanks to “high comparison basis on Martell and Scotch but acceleration of Jameson, Beefeater, Malibu and Havana Club”.

Strategic local brands increased by 2%, while the firm’s speciality brands division rose 15%, bolstered by Lillet apéritif, Monkey 47 gin, Del Maguey mezcal and Altos Tequila.

During the company’s full-year 2019 results, Pernod Ricard unveiled a share buyback scheme for up to €1bn (US$1.11bn), which will be brought into effect across full-year 2020 and 2021.

The French group said it plans to sign an agreement with an investment services provider to implement the first portion of the programme.

As a result, Pernod Ricard will start to buy its own shares for a maximum sum of €150 million (US$166m).