Dip in Q3 sales at Pernod Ricard

By Jo Gilbert

Published: 21 April, 2016

Growth for the third quarter of the fiscal year at Pernod Ricard is down 3% due to shrinking demand in China and an earlier Chinese New Year.

Favourable shipment phasing in the USA failed to offset currency volatility and weak demand in China, partly due to an earlier Lunar New Year, which led to a declining of -3% in reported growth for Q3. Foreign exchange also had negative impact of -4%.

The figures were included in the company's most recent fiscal report released today.

Despite the decline in the third quarter, Pernod Ricard is still in growth for the first nine months of FY16, with organic growth up 3%.

The first nine months of FY16 sales totalled €6,813 million, with reported growth at +4% thanks in particular to a positive USD impact.

Regionally, this was driven by strong growth in the Americas (+6% YTD) driven by a dynamic USA (partly enhanced by shipment phasing), modest growth in Asia and the rest of the world (+2% YTD) with continued strong growth in India and Africa but a decline in China, and resilient sales in Europe (+1% YTD), driven mainly by Spain.

Today, Alexandre Ricard, chairman and CEO, said: "Our sales growth to date at +3% is solid in an environment that remains contrasted. Our strategy has remained consistent and is driving results: innovation is accelerating; operational excellence is driving efficiencies; our ongoing initiatives in the USA are starting to deliver; we are working actively to develop the new phase of growth in China, where we remain confident in the medium-term potential despite the tough current context.

"We confirm our FY16 guidance of organic growth in Profit from Recurring Operations between +1% and +3%."

Sales for the company have declined steadily in China, where the government's anticorruption campaign has sapped spending on luxuries such as expensive liquor.

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