France's Pernod Ricard reported a 1% fall in full-year organic sales, largely in line with forecasts and its own guidance, as it managed to mostly offset deep problems in its key U.S. and Chinese businesses.
The world's No.2 Western spirits maker maintained its full-year forecast in April even as sales in two of its largest markets faltered, banking on an uptick in demand in the fourth quarter.
Net Sales Decline
Pernod Ricard's net sales in the U.S. declined by 9% and it saw an even steeper 10% drop in China. However, it said most other markets had seen a recovery in volumes in the second half and that it enjoyed decent growth in other key regions like India, where sales were up 6%.
It said this helped it deliver on its goal to end the year with net sales broadly stable, and just ahead of the 1.2% decline expected by analysts.
The company had achieved 'robust results... within an environment of economic and geopolitical uncertainty', it said in a statement.
Pernod Ricard and rivals have suffered as a post-pandemic boom in expensive spirits sales has reversed amid high interest rates, inflation and other difficult economic conditions.
Pernod Ricard in particular has suffered as retailers and wholesalers in the United States cut back on pricier spirits stock to reflect lower demand. In China, meanwhile, sales have also been softer than anticipated as a troubled economy dented consumer confidence.
"Our global scale, our agility and our portfolio of brands, the most extensive in the industry, combined with our capacity to understand and to invest behind our consumers’ desires and aspirations, puts us in a very strong position to navigate these challenges," commented Alexandre Ricard, chairman and chief executive.
'Soft' First Quarter
Pernod Ricard said it expected a 'soft' first quarter of 2025, with further U.S. inventory adjustments and a 'very weak macro context in China'.
Elsewhere, however, it expects a good performance and continued volume recovery, bringing net sales back to growth.
It would also sustain its organic operating margin, which expanded 80 basis points in its 2024 financial year thanks to higher pricing and tighter spending.
Profit from recurring operations grew well ahead of estimates, up 1.5%.
Medium-term, Pernod Ricard said it remained confident it could achieve closer to 7% organic net sales growth.
It proposed a dividend of €4.70 per share – flat compared to last year.
Additional reporting by ESM
