French spirits group Pernod Ricard reported a worse-than-expected decline in third quarter sales but said it was confident of delivering a strong performance over its 2023 financial year, helped by very strong sales in the fourth quarter.

Pernod, the world’s second-biggest spirits group after Diageo, predicted organic growth of some 10 per cent in profit from recurring operations in its full financial year ending June 30, with some expansion in operating margin.

The drinks giant, which also owns Mumm champagne, Absolut vodka and Martell cognac, reported sales of €2.39 billion in the three months to March 31 – a 2.2 per cent decline on a like-for-like basis, which was below analysts’ expectations of 0.5 per cent growth.

The third quarter performance reflected high comparables and soft demand for Martell cognac during the festive season in China.

Sales for the nine-months reached €9.5 billion, a like-for-like rise of 7.6 per cent. This followed a 12 per cent organic sales growth in the first-half of the year.

“Our very strong nine-month performance was broad-based and confirms the strength of our business,” Pernod’s chairman and chief executive, Alexandre Ricard, “with resilient volumes, strong pricing and continued dynamism in all our regions and spirits categories. While the global environment remains volatile and as markets normalise, we are confident in delivering a strong performance for the full year, with very strong sales expected in our fourth quarter.”

The group expects profits from recurring operations to expand by 10 per cent in its current financial year.

Pernod Ricard’s next fiscal year starts on July 1.

– Reuters

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