Pernod Ricard Gets Profit Boost From U.S., Emerging Markets

By Jason Chow

PARIS--French liquor group Pernod Ricard SA (RI.FR) said Thursday its first-half profit for the fiscal 2016 year rose 9% as strong sales in the U.S. and emerging markets along with a low euro boosted the bottom line.

The owner of Absolut vodka and Jameson whisky said profit for the six-month period ending Dec. 31, rose to 909 million euros ($1.03 billion), up from EUR834 million in year-earlier period.

The company's profit from recurring operations, the measuring stick that analysts and the company often use, rose 6% during the half-year period to EUR1.44 billion from EUR1.36 billion in the same period in fiscal 2015.

Meanwhile, second-quarter revenue for the world's no. 2 drinks conglomerate after Diageo PLC (DEO) rose 6% as strong sales of Jameson whisky and Perrier-Jouet champagne made up for declining sales of Absolut and Chivas Regal scotch whiskey. Organic revenue growth, which strips out the favorable effect of the low euro, was at 4% for the quarter, the company said.

Organic sales growth for Jameson was 11% while Perrier-Jouët posted 10% organic growth during the quarter. Absolut declined 3% and Chivas Regal slipped 2%.

Sales in its Americas region, dominated by the U.S. market, rose 4% in the quarter, while its Asia/Rest of World regions increased 14%. Those two areas made up for a 2% decline in Pernod's home region of Europe.

However, China remained weak. The country, which was formerly a major driver of growth, saw its sales decline 2% over the six-month period. However, when adjusting for the fact that Chinese New Year came earlier this year, sales in China actually slid 8%. Sales in China have declined steadily since a government anti-corruption campaign took bite in 2013 and discouraged spending on luxuries such as expensive liquor.

Despite the weaker China, the company confirmed its forecast for 1% to 3% growth in profit from its recurring operations.

-Write to Jason Chow at jason.chow@wsj

(END) Dow Jones Newswires

February 11, 2016 01:50 ET (06:50 GMT)

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