Travel retail proves a mixed cocktail for Pernod Ricard in first quarter

Travel retail turned in a mixed first-quarter performance at drinks giant Pernod Ricard, which today unveiled a +4% organic growth in sales for the period to € 2,248 million. Reported growth was +1%, affected by unfavourable foreign exchange impact.

Performance in the Americas was described as “dynamic”, with sales rising by +8% year-on-year, driven by continued strength in the USA. Travel Retail Americas showed a return to growth with better performance from duty free across the zone in terms of product mix and pricing.

Stability was noted for Asia-Rest of World with the key China market improving but Africa and the Middle East “getting tougher”.

pernod-table-1 pernod-table-2Travel Retail Asia was impacted by a “difficult environment with Q1 impacted by tough commercial negotiations”, the company said. Korea duty free showed showed improvement.

Europe posted “solid” growth of +6% overall but travel retail declined, hit hard by a downturn in Eastern Europe.

The group’s Strategic International Brands (+3%) were a key driver of overall improvement. This was the result of Jameson’s continued strong momentum, good growth on Ballantine’s and improvement from Absolut and Martell, the company said.

pernod-table-4The Strategic Local Brands grew +5% thanks to Indian whiskies and Seagram’s gin in Europe but were affected by difficulties for Imperial in South Korea. Strategic Wines were down -1%, mainly due to shipment phasing.

pernod-table-5pernod-table-6Chairman and Chief Executive Officer Alexandre Ricard stated: “We have had a good start to the financial year, consistent with our full year guidance. Therefore, we confirm our FY17 guidance of organic growth in profit from recurring operations of between +2% and +4%.

“We will continue to implement our long-term growth strategy, focusing investments behind our priority brands, markets and innovations and remaining disciplined on pricing and costs.”

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