Pernod Ricard Profit Rises on Whiskey, Champagne Sales

PARIS—French liquor group Pernod Ricard SA said Thursday its first-half profit for the fiscal 2016 year rose 9% on strong sales in the U.S. and some emerging markets helped by the euro's weakness against the dollar.

The owner of Absolut vodka and Jameson whiskey said profit for the six-month period ending Dec. 31, rose to €909 million euros ($1.03 billion), up from €834 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 €1.44 billion from €1.36 billion in the same period in fiscal 2015.

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

The modest growth at Pernod highlights the shifting dynamics that are driving its spirits business: The continued rise of the U.S. and the Jameson whiskey brand, compensating for the formerly fast-growing Chinese market and the flagship Absolut vodka label, which continue to drag.

Organic sales growth for Jameson was 11% while Perrier-Jouë t 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 operations in Asia and the rest of the world increased 14%. Those two areas made up for a 2% decline in Pernod's home region of Europe.

Pernod said demand in 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 Lunar New Year came earlier this year, sales in China actually slid 8%. Sales in China have declined steadily since a government anticorruption campaign took bite in 2013 and discouraged spending on luxuries such as expensive liquor.

Despite the weaker Chinese market, the company confirmed its forecast for 1% to 3% growth in profit from its recurring operations for the full fiscal year.

(END) Dow Jones Newswires

February 11, 2016 02:55 ET (07:55 GMT)

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