The strong US spirits sector is still looking attractive, according to analysts

The strong US spirits sector is still looking attractive, according to analysts

Spirits volumes in the US off-trade fell last month, but the outlook remains healthy for the sector as pricing stayed strong, according to an analyst. 

Total industry volumes dropped 2.3% in the four weeks to 25 May, Nielsen figures cited by Nomura revealed today (10 June). However, analyst Ian Shackleton noted this was against some strong year-on-year comparisons.

"Although volume growth was negative, we do not see this as a change in trend and remain upbeat on the US spirits outlook," the note said. 

Diageo outperformed most of its competitors on pricing, with a price/mix of +5.3%, ahead of the industry average of +3.9%. However, its volumes were down 6.3% in the four weeks. Gordon's Gin suffered with a 10.2% fall in volumes, the figures showed. 

Pernod Ricard's volumes fell 2.8% overall, but its Chivas Brother brands saw a 67.1% leap, the figures showed. 

Nielsen figures account for around 10% of total US spirit volumes, according to Nomura. 

Nomura said it continued to prefer Diageo as an investment due to its US exposure and the fact that Pernod and Remy Cointreau are likley to be more affected by the slowdown in China.