Pernod Ricard recovery gathers pace in Q1

Resilient off-trade sales in the USA and Europe helped Pernod Ricard rally during the first quarter of fiscal 2021.

The Jameson, Absolut and Chivas Regal producer reported that organic sales were down just 6% year-on-year in the three months to September 30.

That represents a strong sequential improvement on the previous quarter, as organic sales decreased by 36.2% in the three months to June 30 (Q4 2020).

Pernod Ricard reported strong shipments to the USA and China ahead of the festive season. It also noted “good resilience in Europe, thanks to off-trade and ‘staycation’ over summer”.

There was “continued dynamism” in the UK and Germany and near stability in France, but declines in Spain and Russia. India was in double-digit decline.

The firm was boosted by a partial reopening of the on-trade around the world, but that channel is still significantly disrupted, and travel retail remains in sharp decline, despite some domestic travel resuming.

Alexandre Ricard, chairman and chief executive, said: “Our first quarter is encouraging. Sales were still in decline, but the business has recovered significantly vs. Q4 FY20, thanks to the partial reopening of the On-trade and the strong resilience of our brands in the Off-trade.

“For FY21, we expect continued resilience of our business in an uncertain and disrupted environment.

“I would like to take this opportunity to praise our teams, whose engagement and performance are exemplary in these very challenging times.  We will continue to implement our strategy, in particular accelerating our digital transformation. We will tightly manage costs while maintaining the agility to reinvest to adjust to market opportunities.”

Pernod Ricard’s strategic international brands declined 10% during Q1. Martell, Chivas and Ballantine’s all struggled, largely as a result of the travel retail situation, but the firm noted strong growth of Malibu and The Glenlivet, and resilience of Jameson.

Local brands were down 6%, but speciality brands included Lillet, Malfy, Aberlour, Avion, Altos and Monkey 47 grew 30% and wine sales were up 9%, with Campo Viejo, Bracott Estate and Jacob’s Creek all in growth.

Reported Sales declined 10% due to unfavourable FX impacts, mainly from the US dollar and emerging market currencies. Q2 is expected to still be strongly impacted by Covid-19, but the business anticipates that sales will return to growth in H2.