Pernod Ricard gets fiscal year off to upbeat start

Sales of Jameson and Powers up as demand for spirits in China and India soars

 Photograph: Christophe Morin/Bloomberg

Photograph: Christophe Morin/Bloomberg

 

Jameson whiskey performed strongly in the United States and Britain in the first quarter of the year as Irish Distillers owner Pernod Ricard started its fiscal year with an upbeat tone.

Sales at the company, which owns Jameson and Powers, grew by 10.4 per cent on an organic basis in the first quarter, the company said Thursday, beating the average analyst forecast for 7.9 per cent.

Although growth in Europe and the Americas was uninspiring, Jameson reported double digit growth in the US, and put in a stronger performance in the UK along with the company’s Absolut vodka and Beefeater gin brands.

Sales in Asia and the rest of the world surged 23 per cent, with China and India doing notably well.

Demand for premium foreign spirits in China and India has soared amid rising incomes. The boon in Asia echoes last week’s strong performance by rival LVMH’s wine and spirits division, which includes Belvedere vodka and Moet and Chandon champagne.

While the company is benefiting from growth in China and India, the decline in emerging market currencies took a bite out of sales. Reported growth was much slower, at 7.2 per cent, because of declines in the Indian rupee and Turkish lira.

Pernod Ricard reiterated its prediction of 5-7 per cent profit growth. In August, the Paris-based company had increased the forecast by a percentage point, on the back of strong demand in Asia, where it sells brands such as Martell cognac and Ballantine’s Finest Scotch whisky.

The drinks group has begun returning more cash to shareholders, proposing a higher dividend from fiscal 2017, reflecting the company’s accelerating growth and reduced debt. – Bloomberg