Pernod Ricard H1 sales drop 3%

Absolut owner Pernod Ricard saw organic revenue fall by 3% in the first half of fiscal 2024 and now expects flat sales for the full year.

Reported net sales for the group fell to €6.59 billion (US$7bn) in the six months ending 31 December 2023.

The results follow a positive fiscal 2023, with the French firm’s sales up by 10%.

The group’s ‘strategic local brands’, which includes Seagram’s whisky and coffee liqueur Kahlúa, was the only division to grow (up by 4%).

Its ‘strategic international brands’ fell by 4%, with ‘good growth’ for Royal Salute whisky (up by 8%) and Havana Club rum (up by 3%).

The company reported declines for the rest of its ‘strategic’ spirits brands including Absolut (down by 2%) Martell (down by 8%), Jameson (down by 1%), Chivas Regal (down by 7%) and Ballantine’s (down by 8%).

Its ‘speciality brands’ dropped by 5%, despite ‘solid performances’ from Altos Tequila, Italicus and Ki No Bi gin.

Sales by region

Sales in the Americas fell by 7%, with US sales also down by 7%. The group cited ‘resilient consumer demand’ amid a normalisation of the market, and expects improvement in the second half of the year.

The Asia and rest-of-the-world region grew by 1%, although sales slumped in China by 9%. India rose by 4%, with the firm adding there was ‘good growth’ in Japan, Taiwan and Australia.

Europe sales decreased by 4%, although net sales excluding Russia were up slightly by 1%.

Global travel retail struggled, with sales down by 3% due to a lag in the recovery of Chinese travel.

The firm reiterated its goal of reaching the upper end of the 4% to 7% growth range in net sales for FY2023 to FY2025, although it now expects flat sales for the full 2024 fiscal year.

Alexandre Ricard, chairman and chief executive officer, said: “We delivered a robust performance in the first half of the year, as we confidently steer Pernod Ricard through the normalisation of the spirits market, following two years of outstanding growth.

“We achieved strong gross margin expansion on the back of substantial pricing actions, thanks to the power of our premium portfolio.

“With a diversified footprint spanning mature and emerging regions and a broad presence across spirits categories, we are able to weather volatility and continue to gain share in many markets.

“I am convinced that our sound strategy, together with the dedication, agility, and exceptional engagement of all our teams around the world, will enable us to deliver our ambitions.”