FRANCE: Pernod's spirits lifted during mixed quarter
The French drinks said today (26 October) that net sales rose 9.2% to EUR1.5bn (US$1.9bn) in the three months to 30 September. On an organic basis, and including contributions from its former Allied Domecq brands, sales rose 5.6%
It was Pernod's spirits division, including brands like Ballantine's Scotch whisky and Stolichnaya vodka, which drove the rise in revenues. Pernod saw spirits sales rise by over 7% thanks to strong performances from Ballantine's and Stolichnaya, as well as Martell Cognac and Jameson Irish whiskey.
Nevertheless, Pernod's flagship Scotch brand Chivas Regal suffered during the quarter with sales down 6%. The company blamed the postponement of promotions in the US, Spain and China for the fall in sales of Chivas.
Pernod's wine business continued to suffer with sales down almost 5%. The company, which owns wine brands including Jacob's Creek and Mumm Champagne, saw sales fall in the UK and the US.
Pernod insisted the quarter did not "fully reflect" its underlying performance. The company said this was due to factors including a comparison against the corresponding period last year when it first included the ex-Allied brands in its results, a move that "resulted in sales which were either abnormally low or too high, depending on the markets".
Pernod also blamed "disruption" in markets including Russia, Thailand and Lebanon for weighing on its results. The company added the postponement of promotional activities in some markets meant sales were being "transferred" into the second quarter.
The company added that sales in all its key regions rose during the quarter. Its Asia and the Rest of the World business fared best, with sales up 14% to EUR443m.
Chairman and CEO Patrick Ricard said: "The first-quarter performance demonstrates the vitality of the group's operations."
He confirmed Pernod's annual financial targets of a 4-6% rise in sales in an organic basis and "strong double-digit" in net profit.
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