French spirits maker Pernod Ricard, which is being targeted by activist investor Elliott, said it was now expecting annual profit growth at the top end of its expectations, despite a slowdown in sales growth in the third quarter.
Pernod, which owns Mumm champagne, Absolut vodka and Martell cognac, said that for its 2019 financial year it was now targeting an organic rise of around 8% in profit from recurring operations, at the top of its guidance of 6-8% growth given back in February.
Like-For-Like Gain
Pernod also reported sales on Thursday of €2.003 billion euros in the three months to March 31, a 2.5% rise on a like-for-like basis, yet marking a slowdown from 5.6% growth in the second quarter.
This was slightly below the average of analysts' estimates for 2.8% growth in a consensus of analysts compiled by the company.
Pernod, which had benefited from advance cognac shipments ahead of the Chinese New Year, had flagged in February that sales growth would moderate in the second half of the year.
The slowdown reflected inventory management of Martell cognac in China and de-stocking in the United States.
Pernod, the world's second-largest spirits group behind Diageo, is under pressure from U.S. hedge fund Elliott Management to improve profit margins and corporate governance.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
