RI Pernod Ricard

   By Cristina Roca 
 

Pernod Ricard SA (RI.FR) said Thursday that first-quarter sales were boosted by its performance in Asia but warned that it expects sales growth to moderate for the full year.

The French premium spirits maker had sales of 2.39 billion euros ($2.76 billion), representing organic growth of just over 10%, beating a consensus forecast of 7.1% organic growth provided by FactSet. On a reported basis, sales grew 7.2%, hampered by unfavorable foreign currency effects--mainly from the Turkish lira and the Indian rupee.

Growth was driven by the Asia-Rest of the World region, where Pernod posted 23% sales growth. Sales in China, which accounts for roughly 10% of total sales, grew organically by 27%, thanks to strong demand and inventory-building ahead of China's festive season, the company said. India also performed strongly, posting 34% organic sales growth, thanks to low comparison bases and good momentum, Pernod said.

American and European markets proved more challenging, posting organic sales growth in the low-single digits.

Pernod had already flagged that the first quarter would be "very strong" thanks to India and China. The maker of Absolut vodka and Jameson whiskey confirmed full-year guidance for 5% to 7% organic growth on its profit from recurring operations, noting that the first half of the year will benefit from the earlier Chinese New Year.

It warned that growth will moderate for the full year as Martell cognac returns to its medium-term volume growth target of high-single digits. Pernod's mid-term objective is mid-single-digit top-line growth, Managing Director for Finance Helene de Tissot said on a conference call.

Analysts at Bryan Garnier said the expected deceleration in the second half is "unsurprising," given the timing of Chinese holidays.

Pernod said it would continue to pursue its set strategy and may make bolt-on acquisitions or dispose of nonstrategic brands as part of its portfolio management.

The company expects a "slightly negative" foreign-currency impact and pressure from rising input costs in fiscal 2019, it said.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

October 18, 2018 04:49 ET (08:49 GMT)

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