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Pernod Ricard has posted a slight decline in full-year organic sales largely in line with analyst expectations.
The group’s full-year sales for the year to 30 June were down 1% organically to €11.6bn (£9.8bn), compared to analyst predictions of a 1.2% slide. Reported sales were down by 4% owing to negative foreign exchange impacts linked to the Argentinian peso, Turkish lira, US dollar, Chinese yuan and Indian rupee.
Declining sales in key markets such as the US (–9%), China (–10%) and Europe (–5%) were offset by growth in India (+6%) and across global travel retail (+2%).
Profits from recurring operations, meanwhile, grew organically by 1.5% to €3.1bn, attributed to “strong” organic gross margin expansion achieved through “pricing, operational efficiencies and strict cost control”.
Pernod Ricard’s chairman and CEO Alexandre Ricard said the “robust” set of financial results came “within an environment of economic and geopolitical uncertainty and spirits market normalisation”.
The group’s “global scale”, “agility” and portfolio of brands put it “in a very strong position to navigate these challenges,” he added.
Across Pernod Ricard’s strategic international brands division – a unit which includes Jameson whiskey, Martell cognac and Absolut vodka – sales fell by 3%, led by “sharp” declines on Martell in China, and challenges in scotch whisky in the US and China.
Its strategic local brands division saw sales climb by 5% thanks to “strong momentum” on Seagram’s whiskies in India. Speciality brands, meanwhile, saw a sales decline of 2%.
Pernod Ricard and other spirits rivals such as Diageo and Rémy Cointreau enjoyed a boom in sales post-pandemic, but have suffered – particularly in the US – as shoppers have reined in pricier booze purchases.
Sales in China have also been largely soft due to weakening consumer confidence.
In April, Pernod Ricard maintained its full-year forecasts despite missing third-quarter sales forecasts amid high interest rates, inflation and other economic headwinds.
Looking ahead, the Paris-headquartered group said it expected a “soft” first quarter of 2025, citing “further inventory adjustments in the US” and “a continued very weak macro context in China”.
It said it remained confident of achieving net sales growth at “the upper end” of its 4%-7% medium-term guidance.
Analysts at Bernstein said Pernod Ricard had ended “a disappointing year” with a “solid” set of fourth quarter results.
They cautioned, however, that US performance remained “weak” and the group could expect “an even bigger decline” in China in the first quarter of FY25 owing to tough comparables.
Shares in Pernod Ricard were up by nearly 2% in early trading.
Morning update
Separately, Pernod Ricard has announced the purchase of a minority stake in Almave, a non-alcoholic blue agave-based spirit brand co-founded by Formula One driver Lewis Hamilton.
Pernod Ricard said it would bring its “strong experience in brand building and global distribution” to help grow the non-alcoholic tequila alternative, which is produced by global spirits company Casa Lumbre in Mexico.
In the UK, Almave is presently distributed by Mangrove and sold with retailers including Amazon, The Whisky Exchange and House of Malt.
Financial terms of the deal were not disclosed.
On the markets this morning, the FTSE 100 is up 0.1% to 8,351.66pts.
Among the early risers are Naked Wines, which has started the day up 3.1%, to 57p, and Pets at Home, which is up 1.2% to 306p.
Hilton Food Group is down 2.5% to 950p, while Pernod rival Diageo is down 1.25% to 2,488p.
Yesterday in the City
After a slump in lunchtime trading, the FTSE 100 rallied to end the day near flat at 8,343.85pts.
Naked Wines finished up 8.1% to 55.1p, as the market reacted favourably to the release of the group’s full-year results.
Other risers included coke bottler Coca-Cola HBC – up 3.1% to 2,826p as it carried out the next round of its share buyback programme – and McBride, which climbed 1.5% to 133p.
Among the biggest fallers were Ocado, sliding 3.8% to 338.8p, and Vitmo maker Nichols, which fell 3.4% to 1,150p.
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