By Dominique Vidalon
PARIS (Reuters) – French spirits group Pernod Ricard said it expected strong sales growth in its 2022 fiscal year despite potential disruptions tied to the COVID-19 virus, after buoyant demand in the United States, China and Europe helped it beat first-half profit and sales forecasts, lifting its shares by over 3%.
Pernod, which owns Martell cognac, Mumm champagne and Absolut vodka, said sales growth would drive operating margin expansion, although this would moderate from the first half due to increased investments.
Resilient consumption by people staying at home, the reopening of bars and restaurants and a gradual recovery in travel retail would fuel sales growth across regions, it said.
Chairman and CEO Alexandre Ricard told Reuters by phone it was too early to make a quantitative guidance for sales or profit growth in fiscal 2022.
“We are giving a qualitative guidance. A key unknown is the performance during the Chinese New Year this month,” Chairman and CEO Alexandre Ricard told Reuters by phone.
“We will have more visibility in mid-March, though we remain very confident over growth momentum,” he added.
Pernod, the world’s second-biggest spirits group, said profit from current operations in the six months to Dec. 31 reached 1.998 billion euros ($2.28 billion), an organic rise of 22% that was more than analysts’ expectations for a 16.7% rise.
Sales totalled 5.959 billion euros in the first half, representing an organic rise of 17%, compared with analysts’ expectations for a 15.1% rise.
As expected, sales growth slowed to 14% in the second quarter from 20% in the first quarter, when Pernod Ricard had benefited from a low comparison base a year ago.
Pernod Ricard had flagged that the comparison base would progressively become less favourable as the year progressed.
Pernod’s fiscal year started on July 1.
Last month, rival Diageo reported first-half sales up nearly 16%, buoyed by high-end spirits for home use while bars increased orders as they reopened after lockdowns.
($1 = 0.8752 euros)
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Subhranshu Sahu)
