Strong demand for Jameson helps lift Pernod Ricard sales

Irish Distillers owner Pernod Ricard said continued demand for Jameson Whiskey in the US helped it record a 3 per cent rise in underlying sales in its first quarter.

Pernod said it expects sales to improve gradually this financial year in its main market of the United States and in Europe, but said China, where sales fell 9 per cent in the past three months, remained difficult.

The world's second-biggest spirits group behind Diageo said a resilient Europe and robust sales in the US helped it beat market expectations.

The owner of Mumm champagne, Absolut vodka, and Ballantine’s whisky said sales in China, which makes 9 per cent of group sales, were hit by wholesaler de-stocking and a slowdown in the less expensive Noblige cognac.

Like its global rivals, Pernod has also been hit by a Chinese government crackdown on luxury gift-giving and personal spending by civil servants, as well as by slowing economic growth in its second-biggest market.

Pernod's comments on China contrasted with those of Remy Cointreau and LVMH's Moet Hennessy spirits division last week, who had said cognac demand in China was improving slightly.

Pernod forecast growth in underlying profit from recurring operations of between 1 and 3 per cent for the year ending June 30, 2016. That would compare with profit growth of 2 per cent achieved in its 2014/15 fiscal year.

For the first quarter ended September 30th, Pernod reported sales of €2.223 billion, a like-for-like rise of 3 per cent.

The company-compiled average of analysts’ estimates was for underlying sales growth of 1.1 per cent in the quarter.

Reuters