Pernod Ricard Lifts Profit Despite Quarterly Sales Decline

PARIS—French liquor group Pernod Ricard SA said Thursday its full-year profit rose despite declining sales in the last three months of its fiscal year.

The owner of Absolut vodka and Jameson whiskey said profit for the year ending June 30 rose to €1.24 billion ($1.38 billion) from €861 million a year earlier.

The company's profit from recurring operations, the measuring stick that analysts and the company often use, rose 2% during the period to €2.28 billion from €2.24 billion in fiscal 2015.

Meanwhile, full-year revenue for the world's no. 2 drinks conglomerate after Diageo PLC rose 1% 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 2% for the year, the company said, in line with analysts' expectations.

"In a contrasted environment, we expect to continue improving our business performance year-on-year," said, Pernod's Chairman and Chief Executive Alexandre Ricard.

The earnings provide further evidence of an uptick in the spirit industry, with Diageo, Ré my Cointreau and Campari all reporting solid numbers this summer in comparison with struggling brewers.

Organic sales growth for Jameson was 16% while Perrier-Jouë t posted 9% organic growth during the year. Absolut declined 4% and Chivas Regal slipped 4%.

However, sales in the three months to June declined in all of the company's regions. Sales in its Americas region, dominated by the U.S. market, fell 9% in the quarter, while its Asia/Rest of World regions dropped 10% and sales fell 2% in Pernod's home region of Europe. Restated for two one-off events in France and the U.S., sales rose 2%, in line with the full year performance, the company said.

China also remained weak. The country, which was formerly a major driver of growth, saw its sales decline 9% over the fiscal year. Sales in China have declined since a government anticorruption campaign took hold in 2013 and discouraged spending on luxuries such as expensive liquor.

Pernod said it is targeting growth in profit from recurring operations of between 2% and 4% in fiscal 2017. It will propose a dividend of €1.88 at its annual general meeting, up 4% on last year.

Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

September 01, 2016 04:05 ET (08:05 GMT)

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