Pernod Ricard posted first-quarter sales (to 30 September) of €2,236 million, down by -10% year-on-year and -6% in organic terms. But the company noted that this was a “marked improvement” compared to Q4 and said that it expected sales growth to turn positive in the second half.
Key dynamics include a “very resilient” off-trade performance in the USA and Europe; partial opening of the on-trade and the continued “significant decline” in travel retail (-64% year-on-year), despite some domestic travel resuming.
More encouragingly however, the company highlighted the “positive impact of the opening of Hainan Island to spirits duty free sales”, a reference to the expansion of allowances and categories introduced on 1 July under the updated offshore duty free shopping policy.
By geography, Pernod Ricard highlighted a good start to its financial year in the USA and China, with strong shipments ahead of the festive season and resilience in Europe led by the off-trade and ‘staycations’ over the Summer. Within this, it noted “strong dynamism in the UK and Germany, near stability in France but declines in Spain and Russia”. India however remained in double-digit decline.
By category, sales were driven by:
- Strategic International Brands: -10%, with significant declines for Martell, Chivas and Ballantine’s, due mostly to travel retail, but continued strong growth of Malibu and The Glenlivet, and resilience of Jameson;
- Strategic Local Brands: -6%, with decline of Seagram’s Indian whiskies but double-digit growth of Kahlua, Passport, Ramazzotti and Wiser’s;
- Specialty Brands: +30%, thanks in particular to Lillet, Malfy, Aberlour, Avion, Altos and Monkey 47;
- Strategic Wines: +9%, driven by double-digit growth of Campo Viejo and Brancott Estate, and Jacob’s Creek at +8%;
Chairman and Chief Executive Officer Alexandre Ricard said: “Our first quarter is encouraging. Sales were still in decline, but the business has recovered significantly versus 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 Global Travel Retail (GTR) was a Platinum Partner at last week’s Moodie Davitt Virtual Travel Retail Expo, sharing its strategy around data and digitalisation amid the changing world of travel retail. The company contributed to the Knowledge Hub sessions, with a Q&A involving Pernod Ricard GTR Strategy & Insights Director Anuj Roy among the highlights (see video below).
For more on Pernod Ricard at the Virtual Travel Retail Expo, click here.
