French wines & spirits giant Pernod Ricard posted a +7.2% rise in reported sales (+10.4% organic) to €2.387 billion for the first quarter of its 2019 financial year.
The “very strong” performance was aided by “dynamic” growth in Asia-Rest of World, at +23%. This was attributed in part to the strength of travel retail. Pernod Ricard noted the success of the channel in Asia and Africa/Middle East, but noted “ongoing difficulties” in South Korea.
Travel retail performed strongly in an otherwise “modest” +2% growth in the Americas.
Overall performance in Europe was “mixed”, with just +1% growth reported. Travel retail struggled in the region, however, delivering a “modest decline” due to what was described as a “soft start” on Absolut and whiskies.
Strategic Local Brands grew +15% (compared to +2% in FY2018 Q1).
Strategic International Brands (+12%) also helped towards overall growth, with Pernod Ricard highlighting Martell and Scotch whisky as well as Jameson.
China resurgent
The key China market saw an encouraging +27% year-on-year rise in sales, driven by “dynamic demand” across all key categories. Sales should normalise for the full year, especially for Martell, Pernod Ricard said. The Cognac brand posted strong first-quarter growth against all price segments, while Chivas had double-digit gains.
[image_magnify src=”https://www.moodiedavittreport.com/wp-content/uploads/2018/02/Martell-Cordon-Bleu-Chinese-New-Year-Limited-Edition-bottle-600.png” src_big=”https://www.moodiedavittreport.com/wp-content/uploads/2018/02/Martell-Cordon-Bleu-Chinese-New-Year-Limited-Edition-bottle-1200.png” alt=”” /]
[With Chinese New Year falling early, Pernod Ricard has strong hopes of a robust first-half performance, particularly for Martell. Pictured is the limited-edition Martell Cordon Bleu bottle launched to celebrate Chinese New Year 2018.]
But global growth to slow?
However, the company warned that global growth would likely slow throughout the financial year. It said that it expects a more moderate end-of-year result, with unfavourable foreign exchange realities a central reason.
Pernod Ricard Chairman and Chief Executive Officer Alexandre Ricard stated: “We have had a particularly good start to the year, as expected. 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%.”
