French spirits group Pernod Ricard noted that it expected strong sales growth in its 2022 fiscal year, despite potential disruptions tied to the COVID-19 virus, after buoyant demand in the United States, China and Europe helped it beat first-half profit and sales forecasts, lifting its shares by over 3%.
Pernod, which owns Martell cognac, Mumm champagne and Absolut vodka, noted that sales growth would drive operating margin expansion, although this would moderate from the first half, due to increased investments.
Resilient consumption by people staying at home, the reopening of bars and restaurants, and a gradual recovery in travel retail would fuel sales growth across regions, Pernod noted.
Alexandre Ricard, chairman and CEO, told Reuters by phone that it was too early to make a quantitative guidance for sales or profit growth in fiscal 2022.
“We are giving a qualitative guidance. A key unknown is the performance during the Chinese New Year this month,” Ricard told Reuters.
“We will have more visibility in mid-March, though we remain very confident over growth momentum,” he added.
Pernod – the world’s second-biggest spirits group – noted that profit from current operations in the six months to 31 December reached €1.998 billion ($2.28 billion), an organic rise of 22% that was more than analysts’ expectations for a 16.7% rise.
Sales totalled €5.959 billion in the first half, representing an organic rise of 17%, compared with analysts’ expectations for a 15.1% rise.
As expected, sales growth slowed to 14% in the second quarter, from 20% in the first quarter, when Pernod Ricard had benefitted from a low comparison base a year ago.
Pernod had flagged that the comparison base would progressively become less favourable as the year progressed.
Its fiscal year started on 1 July.
Last month, rival Diageo reported first-half sales going up by nearly 16%, buoyed by high-end spirits for home use, while bars increased orders as they reopened after lockdowns.