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US and China drag Pernod Q1 sales down

Absolut Vodka owner Pernod Ricard saw organic sales fall by 2% in the first quarter of fiscal 2024 due to declines in the US and China.

Altos Tequila bottles, owned by Pernod Ricard
The growth of Altos Tequila offset some of the decline of other brands in the Pernod Ricard portfolio

For the three months to 30 September 2023, sales totalled €3.04 billion (US$3.2bn), with an 8% decline in both the US and China.

The brand said these losses were offset by a ‘very dynamic performance’ in the rest of Asia, with modest growth in India (up by 1%) and stability in both Europe and travel retail.

In the US, the brand highlighted share gains for brands including Jameson Irish whiskey, Código 1530 Tequila, liqueur brands Malibu and Kahlúa and The Glenlivet whisky, and said it has strong plans for the festive season.

For both the US and China, as well as its whole operation, the brand stated it has a positive outlook for the full year. It believes it remains on track to meet the upper end of the 4% to 7% growth range in net sales for FY2023 to FY2025.

Pernod’s ‘strategic international brands’ declined by 3%, mainly due to Martell Cognac, Jameson and Absolut Vodka in the US and Chivas Regal whisky in Latin America.

The division’s sales were partially offset by ‘strong’ performances for Ricard apéritif, Malibu and Scotch brands Ballantine’s, The Glenlivet and Royal Salute.

The group’s ‘strategic local brands’ increased by 5% – the only division to grow – with Seagram whiskies, Olmeca Tequila and Kahlúa highlighted as positives.

Meanwhile, in its ‘speciality brands’ division, a good performance from Altos Tequila and Jefferson’s Bourbon offset the decline of Lillet apéritif and Monkey 47 gin.

Alexandre Ricard, chairman and chief executive officer, commented: “As expected, we experienced a soft start to the year, yet I am encouraged we have largely offset declines in US and China this quarter, thanks to our good performance in other markets.

“Our strategy over many years has been to build a diversified portfolio and broad geographic footprint across mature and emerging markets. This strategy provides us with the resilience to weather challenging times enabling a consistently solid performance.

“In the months to come, I look forward to sharing with you exciting brand activations and innovations across our full portfolio. I am confident that we can deliver broad-based and diversified organic sales growth in FY24.”

Pernod Ricard saw double-digit growth in fiscal 2023, with its Scotch portfolio rising by 17%.

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