Pernod Ricard today beat quarterly sales forecasts as demand for its high-margin Martell cognac improved in China and sales of its Jameson Irish whiskey continued to surge in the US, its top market.
The owner of Mumm champagne and Absolut vodka, however flagged tougher trading conditions in Africa and the Middle East due to geopolitical tensions.
It kept its forecast for a rise of 2-4% in full-year profit from recurring operations after last year's 2% growth.
"We have had a good start to the financial year, consistent with our full-year guidance," the company's chief executive Alexandre Ricard said in a statement.
Pernod Ricard is the world's second biggest spirits group behind Diageo.
It said it would raise prices in Britain on imported brands in the coming months to protect its margins from a slide in the pound after the country's vote to leave the European Union.
"Consumption in Britain at this stage has not been impacted by Brexit, but the pound has declined and clearly our goal will be to protect our margins as much as we can," Finance Chief Gilles Bogaert told Reuters.
For its first quarter ended September 30, Pernod Ricard reported sales of €2.25 billion, a like-for-like rise of 4%, beating analysts' average estimate of 2.9% in a Thomson Reuters poll.
In China, the company's sales decline slowed to 1% in the quarter from a 9% fall in full-year 2015/16 and Bogaert said that Chinese sales would "clearly" improve this year.
The quarterly performance reflected improving demand for Martell cognac, whose sales rose 3%, boosted notably by the Cordon Bleu premium brand.
Sales of spirits in stores and online in China were robust but continued to lag in bars and restaurants, Bogaert said.
Hit like other spirits makers by a sales downturn in China sparked by a government clampdown on extravagant spending, Pernod Ricard has launched a sales drive there.
It has set up two sales teams in the country, one focused on high-end brands such as Martell and the other on mid-range brands such as Noblige cognac or Ballantine's Finest whisky to better address demand from an emerging middle class.
Its peers have confirmed China is returning to growth, with Remy Cointreau earlier this week saying demand for cognac in was recovering faster than it had expected.
China contributes about 9% of Pernod Ricard sales compared to 17% for the US.
In the US, where sales grew 5%, Jameson Whiskey continued to grow at a double-digit rate after a price hike in September, but Absolut vodka - Pernod's leading brand - was still slightly down in value terms.
Absolut has been struggling as trendy drinkers turn to brown spirits such as bourbon and niche vodkas like Texas-based Tito's Handmade Vodka.
