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Pernod Ricard says virus woes will still have major impact on Q2
[PARIS] French spirits maker Pernod Ricard said sales would return to growth in the second half of its 2020/2021 fiscal year, although the downturn in travel retail and disruptions from the Covid-19 crisis would still impact its second quarter.
Pernod, the world's second-biggest spirits group behind Diageo, made the forecast after its first quarter sales sequentially improved, beating expectations and reflecting resilient home consumption in Europe and the US amid the pandemic, and improving sales in China.
"For FY21, we expect continued resilience of our business in an uncertain and disrupted environment," said chairman and chief executive officer Alexandre Ricard. He added Pernod would accelerate its digital transformation and tightly manage costs while maintaining the agility to reinvest to adjust to market opportunities.
Pernod, which owns Martell cognac, Mumm champagne and Absolut vodka, has along with its peers been hurt by the pandemic, which has led to closures of bars, restaurants and night clubs in many countries and travel restrictions.
When reopenings have been permitted, it has often been with strict social distancing, early closing and reduced capacity, while there have been signs of a resurgence of the virus in Europe.
For the first quarter ended Sept 30, Pernod reported sales of 2.24 billion euros (S$3.59 billion), marking a like-for-like decline of 6 per cent, but also an improvement on a 36.2 per cent fall in the fourth quarter of its last fiscal year.
In China, which contributes 9 per cent of group sales and is the group's second largest market after the US, sales growth was 4 per cent, helped by the reopening of bars and restaurants and strong shipments ahead of the Mid-Autumn celebrations.
In the US, sales also advanced by 6 per cent.