Food & Drinks

Pernod Ricard Surpasses Forecasts After Strong Third Quarter

Q3 results are in for Pernod Ricard. The beverage giant is showing an excellent first nine months of fiscal 2021, reporting organic growth of +19% and reported growth of +12.6%. It previously expected 10% organic profit growth over the year.

Sales for the third quarter of 2021 totaled €1.95 billion ($2.34 billion USD). Zooming out on 2021, sales for the first nine months of the fiscal year totaled €6.94 billion ($8.34 billion USD) at a growth rate of +1.7%. On average, analysts had predicted third-quarter sales at €1.84 billion ($2.21 billion USD). 

The luxury conglomerate cites a command over must-win domestic markets and the strength of strategic international brands like Jameson, Malibu and Martell as the driver behind the growth. 

These reportings are a positive indication for the luxury behemoth after an on-year decline in the first half of fiscal 2021. Signs are pointing to a shift back to normal sales growth after a tumultuous year and a half for the industry.

Looking to the year passing, reported sales from the nine-month period declined -3.7%. Pernod Ricard accredits this to an “unfavorable FX impact linked mainly to Euro appreciate versus USD and emerging market currencies.”

The beverage mega-giant predicts continued growth over the final quarter of fiscal 2021. “In a still uncertain and volatile global context, with the current information available on the pandemic, we will continue to implement our strategy while actively managing resources, in particular strongly reinvesting where efficient,” says Alexandre Ricard, the Chairman and Chief Executive Officer of Pernod Ricard in a statement. “We expect our sales to accelerate in Q4 and accordingly are providing guidance of organic growth in Profit from Recurring Operations for full-year FY21 of c. +10%.”

Fourth-quarter results will be released on November 10, 2021. 

Pernod Ricard notes strong demand in the key US and Chinese markets helped beat the growth slump. Tied in with an excellent Chinese New Year period, sales soared +34% in the Chinese market over the quarter. Martell specifically saw strong growth, as did The Glenlivet, Royal Salute, Absolut and Chivas. 

The Indian market, another must-win market for Pernod Ricard, reported double-digit growth in Q3 from all key brands.

Global travel retail continues to be a sore spot for reasons that need no explaining. As a result, the Absolut brand and the blended Scotch category are in decline. Over the quarter Pernod Ricard saw sales fall -50% in the travel retail category, though there is a notable continued positive performance of offshore Duty-Free islands. 

Stateside, the US market saw growth of +6%, but take note that Irish whiskey’s once-impressive growth is starting to slow. Pernod Ricard credits this to the past launch of Jameson Cold Brew.

Canada saw high single-digit growth, driven largely by the strong performance of Jacob’s Creek, The Glenlivet and Absolut. 

As the industry shifts online, strategic wine brands have seen a growth of +2%, with off-trade dynamism in the UK and Canada to blame. 

Looking forward, the Pernod Ricard team notes it’s still a volatile market, though they expect sales acceleration in line with on-trade gradually reopening and a big push to digital transformation for the company.

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