The Covid-19 pandemic caused sluggish sales in China and travel retail during the third quarter of fiscal 2020. The Absolut, Glenlivet and Jameson supplier reported Q3 sales of €1.74 billion, down from €2 billion the previous year.

The distiller had enjoyed strong growth during the first half of fiscal 2020, but it has now experienced a 2.1% organic sales decrease for the nine months to March 31.

“Performance in H1 through the start of Q3 was solid, thanks to the implementation of our Transform & Accelerate strategic plan,” said chairman and chief executive Alexandre Ricard. “Since then, the Covid-19 pandemic has led to a significant deterioration of the environment across the globe.”

The distiller will pay out an interim dividend of €1.18 per share on July 10, but it has now halted its remaining €500 million share buy-back. A share buy-back of €523 million has been completed already in the current financial year.

Pernod Ricard’s has a cash position of €2.1 billion, and it pledged to maintain investment in future organic growth and value-creating acquisitions. “Our business model and strategy are resilient,” said Ricard.

He added that under current assumptions of the impact of Covid-19, the firm expects to report a decline in profit of around 20% for the 2020 financial year. “We are staying the strategic course while implementing a comprehensive action plan to mitigate costs and tightly manage cash,” he said. “Thanks to our solid fundamentals and strong liquidity position, I am confident in Pernod Ricard’s ability to bounce back from today’s challenges to achieve its growth potential.”

Sales in China are now down 11% year-on-year for the nine months to March 31, due to a severe Q3 decline. Travel retail sales have declined 13%, driven by a sharp decline from February onwards.

Sales in the US and Europe remain in year-on-year growth, although there was a slowdown in March. India is still up 1% year-on-year, but the nationwide lockdown imposed on 24 March has softened its Q3 performance.

It highlighted Lillet, Altos, Redbreast, Monkey 47, Aberlour and Del Maguey as brands showing strong dynamism.