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Pernod Ricard Confident Over FY As Q1 Sales Beat Expectations

Spirits giant Pernod Ricard said on Thursday it was confident sales growth would remain dynamic through its 2023 fiscal year after it delivered forecast-beating sales in the first quarter helped by price increases as consumers trade up to its premium spirits.

Pernod, the world's second-biggest spirits group behind Diageo, successfully raised prices in the United States, its top market, in the quarter while demand was strong in China during the Mid-Autumn festival and in India and a rebound in global travel retail continued.

"I am hugely encouraged by our start to the year," chairman and CEO Alexandre Ricard said in a statement.

Outlook

In an environment that remained volatile with high inflation, the war in Ukraine, and COVID-19 lockdowns in some Chinese cities, the group said it expected sales growth for the full year would remain 'dynamic and broad-based, albeit moderating on a normalising comparison basis.'

It however did not provide a quantitative guidance for the full year.

By 07:02 GMT, Pernod Ricard shares were down 1.1% at 177.95 euros.

RBC analysts said in a note the quarterly performance was 'good' but noted that 'US organic sales growth of 2% is somewhat concerning...it seems that the US market is slowing.'

Pernod Ricard's fiscal year started on 1 July.

First-Quarter Performance

For the first quarter ended 30 September, Pernod - which owns Martell cognac, Mumm champagne and Absolut vodka - reported sales of €3.31 billion ($3.23 billion), a like-for-like rise of 11%, which came above market expectations for a 9.3% sales rise.

In China alone, sales rose 9% in the first quarter thanks strong mid-Autumn festival sales. The Martell cognac brand recorded double-digit sales growth during the quarter despite COVID restrictions.

Sales in global travel retail rose 24% in the first quarter as it continued its recovery outside of China and was on track to deliver profit back to pre-COVID levels, the group said.

News by Reuters, edited by Checkout. For more drinks stories click here. Click subscribe to sign up for the Checkout print edition.

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