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Pernod Ricard reports stable Q3 sales amid market challenges

Published:  25 April, 2024

Pernod Ricard, a global leader in the spirits and wine industry, has reported robust performance in its third-quarter sales figures, indicating improving momentum across various markets. Despite challenges in certain regions like China and the US, Pernod’s premium international spirits portfolio and broad geographic footprint have largely mitigated the impact.

The company highlighted strong results achieved in key markets such as India, Global Travel Retail, Japan, Germany and Turkey. Additionally, there has been improving momentum in Spain, Brazil and South Africa during the third quarter of the fiscal year. The net sales for Q3 reached €2,347m, remaining stable compared to the previous year, with a 2% increase excluding Russia.

The company reported a 9% volume growth during Q3, after four consecutive quarters of decline. However, for the fiscal year-to-date, volumes declined by 4%. 

In terms of regional performance, the Americas witnessed a decline of 7%, primarily attributed to a soft performance in the US market. However, there was strong growth in Canada and Brazil during Q3. In Europe, excluding Russia, the net sales remained resilient with a growth of 4%, driven by markets like Germany and Eastern Europe. Asia and the Rest of the World reported a dynamic and accelerating performance, except for China, where sales declined due to a challenging macroeconomic environment.

Notably, India reported a strong and accelerating performance with an 8% growth in net sales, driven by strong consumer demand and premiumisation trends. On the other hand, China experienced a decline of 12% in net sales, reflecting soft consumer sentiment. Japan reported double-digit growth driven by certain brands, while Korea witnessed a soft performance with improvements in Q3.

Global Travel Retail showed significant growth of 38%, driven by strong performance across the portfolio, gradual recovery of Chinese travellers, and favourable phasing (dividing budget value across the year) in Q3. Strategic International Brands reported a 1% growth, while Strategic Local Brands showed a 5% growth. Specialty Brands, impacted by inventory adjustments in the US, reported a decline of 7%.

Looking ahead, Pernod Ricard remains confident in its medium-term financial framework, aiming for a top-line growth of +4% to +7%. The company expects robust Q4 net sales, leading to broadly stable full-year organic net sales. It will continue to focus on revenue growth management, operational efficiencies and maintaining strict control over costs.

With these strategies in place, Pernod Ricard aims to expand its organic operating margin and drive profitable growth despite challenges in the global market landscape.