RI Pernod Ricard

   By Cristina Roca 
 

French premium-spirits maker Pernod Ricard reported first-quarter sales for the fiscal year ending in June. The company will release half-year results on Feb. 7. Here's what we watched:

SALES PERFORMANCE: The company delivered sales of 2.39 billion euros ($2.76 billion) and organic growth of just over 10% on the back of strong growth in Asia, beating a FactSet-provided consensus for a rise of 7.1%.

WHAT WE WATCHED

COGNAC FEVER: Pernod didn't comment on the pricing of cognac, as Berenberg had hoped, but it did say that since supply is limited, wholesalers have stocked up in advance of the festive season and thereby boosted sales.

The earlier Lunar New Year--which falls on Feb. 5 in 2019, 11 days sooner than it did the previous year--should give second-quarter sales another lift, it said. Martell sales grew 62% in the U.S. this quarter, Pernod said, but for now the cognac brand still makes most of its sales in China.

WHITE DRINKS OUT OF STYLE: As expected by Bryan Garnier analysts, Absolut had a difficult quarter. Pernod said its vodka label--which Bryan Garnier says accounts for 18% of the group's total sales in the U.S.--posted a drop in sales due to phasing, commenting that the category is "difficult."

CHINA SALES: Pernod's 27% quarterly growth in China seems to quell Bryan Garnier's warning that the company's 17% growth figure in China for 2018 is unsustainable--at least for now. Pernod did warn that the second half of this year should be somewhat slower, so it remains to be seen what the full-year growth rate for China sales will be. Bryan Garnier sees China sales normalizing to growth in the range of high single digits to low double digits over the medium term.

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

(END) Dow Jones Newswires

October 18, 2018 10:12 ET (14:12 GMT)

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