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Pernod Ricard Q1'19 sales jump on dynamic Asia performance

Wine and spirits group Pernod Ricard SA on Oct. 18 said fiscal first-quarter sales jumped 7.2% year over year on a reported basis due to a dynamic performance in Asian markets, but it cautioned that growth would moderate in the second half of fiscal 2019.

The maker of Martell cognac and Beefeater gin reported sales in the three-month period through September rose to €2.39 billion from €2.23 billion in the same period a year earlier. On an organic basis, the increase was 10.4%.

A mean consensus of analysts' estimates had pointed to sales of €2.35 billion, according to data compiled by S&P Global Market Intelligence.

Pernod Ricard said reported sales were impacted by unfavorable foreign exchange rates, notably the Indian rupee and the Turkish lira.

The French company reiterated its outlook for the fiscal year ending June 30, 2019.

"We have had a particularly good start to the year, as expected," said Chairman and CEO Alexandre Ricard in a statement. "In an uncertain geopolitical and monetary environment, we confirm our FY19 guidance of organic growth in profit from recurring operations of between +5% and +7%."

In midmorning trading in Paris, Pernod Ricard's share traded up 35 cents, or 0.3%, at €130.25.

Pernod Ricard said sales in its Asia and rest of the world region increased 23% year over year on an organic basis as a result of advanced shipments in China and favorable comparisons in India, where it benefited from better market conditions and its value strategy.

It posted organic sales growth of 2% in the Americas and a mixed performance in Europe, where strong sales in Eastern Europe were offset by declines in France and Spain.

The company said its first-half performance would benefit from the earlier timing of Chinese New Year, but it expected growth to moderate in fiscal 2019, in part due to Martell "coming back in line with its medium-term high-single-digit volume growth target."

Pernod Ricard said it would continue to execute its strategic roadmap with a focus on digital, innovation and operational excellence, although it added that it could shake up its portfolio in the short- or medium-term with bolt-on acquisitions or disposals of nonstrategic brands.