This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
News
‘Challenging’ China hinders Pernod FY sales
Martell owner Pernod Ricard saw organic revenue drop by 1% in the year ending 30 June 2024 after Cognac sales slipped in China.
The French firm reported revenue of €11.6 billion (US$12.85bn) for fiscal 2024, following a strong performance in the previous year (up 10%).
Profit from recurring operations rose by 1.5% to €3.116bn (US$3.5bn) for the 12 months to 30 June 2024.
Pernod Ricard attributed the ‘broadly stable’ full-year performance to ‘strong’ sales in mature and emerging markets, which offset declines in a ‘still-normalising’ US and ‘challenging’ China.
Alexandre Ricard, chairman and CEO, said: “Pernod Ricard achieved robust results for the fiscal year ending June 2024 within an environment of economic and geopolitical uncertainty and spirits market normalisation after two years of exceptional post-pandemic growth.”
Sales in the Americas region dropped by 5%, with the US plunging by 9%. In the States, Pernod highlighted growth for acquired brands Jefferson’s Bourbon and Código 1530 Tequila, while Jameson Irish whiskey held on to share.
Sales in the Asia-Rest of the World region dropped by 3%, driven by a 10% decline in China.
Pernod cited a ‘challenging macroeconomic environment and continuing weak consumer sentiment’ as affecting demand in China.
Sales in India rose by 6% and the group also highlighted ‘very good growth’ in Japan and Taiwan, and ‘strong results’ in Africa and Middle East. However, sales declined in Korea.
Europe’s sales fell by 5% but excluding Russia revenue rose by 2%.
Global travel retail (GTR) posted a 2% uptick.
Category performance
Pernod’s ‘strategic international brands’ declined by 3%. Within this division, Martell Cognac reported the biggest sales drop of all spirits with a 10% decrease due to a ‘sharp decline’ in China.
It was followed by Beefeater gin (down 8%), single malt The Glenlivet (down 6% due to its exposure in North America) and rum liqueur Malibu (down 4%).
Cuban rum Havana Club bucked the trend with an 8% gain, while Royal Salute whisky rose by 5% and Ricard grew by 3%.
While Jameson’s total sales only rose by 1%, the group noted ‘strong growth’ for the brand when excluding the impact of Russia.
Absolut fell by 1% but recorded ‘strong’ gains in Europe (excluding Russia), China and India.
The group’s ‘strategic local brands’ rose by 5%, led by Seagram’s whiskies in India, particularly Royal Stag and Blenders Pride.
Meanwhile, ‘speciality brands’ dropped by 2% after a ‘soft result’ in Western Europe and the US. The group noted ‘good growth’ for Bumbu rum, Skrewball whiskey, Altos Tequila and Lillet.
The full-year sales were announced at the same time as Pernod’s purchase of a minority stake in Lewis Hamilton’s alcohol-free agave ‘spirit’ Almave.
Scotch division
Pernod Ricard’s Scotch whisky arm, Chivas Brothers, reported that full-year sales for the division dropped by 1.6%.
The subsidiary saw a sales drop of 6% in the first half of the financial year (July-December 2023), but returned to growth in the following six months with a 5% gain.
Part of this decline was attributed to Pernod Ricard stopping all exports of its international brands to Russia at the end of April 2023. Excluding the country, full-year sales rose by 1.4%.
Ballantine’s posted an increase of 1%, while Chivas Regal dropped by 1.2%. However, the Chivas brand gained share in 50% of its focus markets, Pernod Ricard said.
Geographically, Chivas Brothers reported gains in Western Europe (up 5%), Japan (up 22%), Africa and Middle East (up 35%) and GTR (up 4%). Sales in Eastern Europe plummeted by a quarter, but excluding the impact of Russia, revenue rose by 8%.
Sales in North America plunged by 19% and were down by 8% in South America.
Chivas Brothers chairman and CEO, Jean-Etienne Gourgues, commented: “Our FY24 performance demonstrates resilience and stability, underpinned by our impactful premiumisation strategy which delivered an upward trajectory in the second half of this fiscal (January-June 2024).
“We’re lapping two historic years, a complex geopolitical landscape and ever-changing consumer trends, yet still delivering on our strategic vision, owing to our broad and balanced footprint.”
Full-year outlook
For fiscal 2025, Pernod Ricard expects full-year organic sales to return to growth as it continues to recover its volumes. The group is aiming for growth of between 4% and 7%.
The company expects a ‘soft’ first quarter due to inventory adjustments in the States and a ‘very weak macro context in China’.
Pernod Ricard’s CEO added: “Our global scale, our agility and our portfolio of brands, the most extensive in the industry, combined with our capacity to understand and to invest behind our consumers’ desires and aspirations puts us in a very strong position to navigate these challenges.”
Related news
Havana Club Mango Lime lands in Germany