Pernod Ricard targets 17% annual profit growth after higher third-quarter revenue

Band Dominique Vidalon

PARIS, April 28 (Reuters)French spirits group Pernod Ricard PERP.PA said on Thursday that strong demand in its major US, Chinese and European markets led to a 20% jump in organic sales in the third quarter, beating analysts’ forecasts by a strong margin.

Pernod Ricard, which owns Mumm champagne, Absolut vodka and Martell cognac, however, said it expects sales to decline in the fourth quarter due to COVID-19 disruptions in China, the gradual normalization of American activities and the conflict in Ukraine.

Despite an increasingly difficult environment, Pernod Ricard forecasts organic growth of 17% in its current operating income for its financial year ended June 30, in line with the current market consensus for growth of 16.9%.

The resilience of stay-at-home consumption, the reopening of bars and restaurants and the continued recovery of travel retail would fuel strong full-year sales growth in all regions, with some increase in operating margin , he added.

Pernod, the world’s second largest spirits group after Diageo DGE.Lreported sales of 2.447 billion euros ($2.57 billion) in the three months ended March 31, up 20% on a comparable basis, beating analysts’ expectations of growth of 14, 3%.

This reflects a 20% rise in sales in Europe despite some deceleration in March due in particular to the impact of the conflict in Ukraine, he said.

In the United States, sales increased by 23% in the quarter, driven by solid demand for Jameson whiskey, Malibu, Kahlua liqueurs and Martell cognac. Widespread price increases in early February and innovations such as Jameson Orange also supported sales in the United States.

In China, third-quarter sales increased 8% from 14% in the first half of the year, with a weaker Chinese New Year performance impacted by COVID-related disruptions.

Pernod Ricard’s financial year begins on July 1.

($1 = 0.9507 euros)

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Sherry Jacob-Phillips)

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