Pernod Ricard sales return to growth in Q3
Absolut owner Pernod Ricard saw organic sales return to growth in the first nine months of fiscal 2021, driven by a double-digit increase in the third quarter.
For the nine months ending 31 March 2021, Pernod Ricard’s sales grew 1.7% to €6.9 billion (US$8.3bn), which marked the firm’s return to growth.
The increase was led by the firm’s third quarter sales, which rose 19.1% to €1.9bn (US$2.3bn).
The sales boost followed Pernod Ricard’s most recent financial results in February, which saw profits drop 2.4% in the last six months of 2020.
The company also reported a 9.5% organic sales drop in its 2020 full-year financial results after the Covid-19 pandemic significantly impacted its travel retail and on-trade sales.
Alexandre Ricard, chairman and CEO, said third quarter sales were “excellent” and helped the firm return to organic sales growth.
He said: “This confirms the strength of our business, with strong dynamism of our domestic must-win markets and good resilience throughout.”
Ricard said the company predicts “accelerated” sales growth for the fourth quarter.
The company’s nine-month sales were boosted by ‘must-win’ markets such as the US and China.
For the first nine months of fiscal 2021, the French firm reported 6% growth in the US. The increase was boosted by The Glenlivet whisky, Malibu rum liqueur, coffee liqueur Kahlua, and Pernod Ricard’s Tequila and American whiskey portfolio.
For the same period, China reported a 34% increase.
The growth in China was due to the ‘excellent’ Chinese New Year celebrations in February, ‘very strong’ growth from Martell Cognac, and ‘continued very strong dynamism’ of The Glenlivet, Royal Salute whisky, Absolut vodka and Chivas Regal whisky.
India was ‘stable’ in the nine-month period, however the firm reported double-digit growth for key brands in the third quarter.
Global travel retail sales plummeted by 50%.
Europe’s sales dropped by 3%, despite growth in Germany, the UK, Eastern Europe and France.
The Americas region (excluding US) rose by 4%, and the Asia-rest of the world region, including China and India, grew 3%.
The company’s strategic international brands increased 1%, led by Martell, Malibu, Jameson Irish whiskey and The Glenlivet.
However, Absolut and the blended Scotch portfolio remained in decline due to their exposure to travel retail.
Strategic local brands were ‘stable’ with a double-digit boost from Kahlúa, Passport Scotch whisky and Ramazzotti digestif.
Speciality brands climbed by 22%, driven by Lillet apéritif, Malfy gin, Aberlour Scotch whisky in Western Europe, and Tequila and American whiskey in the US.
Ricard added: “In a still uncertain and volatile global context, with the current information available on the pandemic, we will continue to implement our strategy while actively managing resources, in particular strongly reinvesting where efficient.”
Pernod Ricard’s guidance for the full year predicts an organic profit growth of 10%.