French spirits maker Pernod Ricard said today it now expected sales to flatline this year after a tough first six months, but is banking on improved demand in key Chinese and US markets from the second half.
Pernod Ricard, which owns Jameson Irish whiskey, Martell cognac, Mumm champagne and Absolut vodka and had previously forecast a rise in annual sales, said strict control over costs would however drive margin expansion, with full-year organic operating profit set to grow at a low single-digit rate.
The world's second-largest spirits maker after Diageo said it would buy back €300m worth of shares this year, having already repurchased €150m of stock in the first half of 2023.
Profit from current operations in the first six months of its fiscal year to December 31 reached €2.144 billion, an organic decline of 3%, but slightly better than analysts' expectations of a 5.1% decline.
Sales at Pernod amounted to €6.59 billion in the first half, down 3% organically and on par with analysts' expectations as an economic slowdown in China dampened demand while inventory adjustments in the US continued after a post-Covid surge.
In China, where sales fell 9% in the first half, Pernod said sentiment remained "cautious" ahead of the Lunar New Year.
Pernod Ricard, like rivals Diageo or Remy Cointreau, has seen strong growth over the past two years with sales lifted by home consumption during Covid and price increases.
Jameson seeing market gains in North America
Irish Distillers said that Jameson - which is one of the top three selling world whiskey brands - reported steady net sales globally in the first half of the financial year.
It said Jameson delivered market share gains in North America, continued acceleration in Asian markets including India, Korea, Japan and China and achieved overall growth in Europe with "dynamic growth" in Ireland, UK, France, Germany, Greece, Poland and Spain.
Overall net sales at Irish Distillers dipped by 1% in the first half of the year, the company said.
Nodjame Fouad, Chairman and CEO at Irish Distillers, said the company's half year financial results reflect a resilient performance overall when compared to the high comparison basis from H1 2023.
"Global net sales of Jameson were steady in the first six months of the financial year, and we saw continued acceleration in Asian markets and growth in Europe," Nodjame Fouad said.
"We remain confident in our growth strategy of diversifying our portfolio of Irish whiskeys and further developing brand affinity for Jameson in mature markets, while growing our geographic footprint across emerging and new markets," she added.
