Sales at Pernod-Ricard up 10% in last quarter

PERNOD-RICARD, the owners of Jameson Irish Whiskey and Chivas Regal Scotch, said organic growth of its range of spirits and wines rose 10% in the last quarter.

Sales were boosted by the performance of its top 14 brands, including Jameson, which achieved an impressive growth of 27%.

The group said first-quarter sales growth beat estimates, driven by sales in its top 14 brands and demand in emerging markets.

In the three months ended September 30, the French group, which took over Irish Distillers in the mid 1980s said organic sales which exclude the impact of acquisitions and disposals, as well as currency movements, were more than double the 4.5% median estimate of eight analysts surveyed by Bloomberg News.

Pernod shares were up 6.7% in Paris trading, the steepest gain in almost six months, as higher sales reassured investors that conditions in Europe and the US were improving.

Due to its strong advertising and marketing support from Pernod, demand for Jameson continues to gain momentum, a fact reflected by the decision to expand storage capacity for the product in Ireland.

Reflecting the consistent and continuing success of Jameson in global markets and with demand forecast to remain in strong growth, Midleton Distillery is approaching its full warehousing capacity, the group said in a recent statement.

Last night a spokeswoman for Irish Distillers confirmed a site has been identified near Dungourney, Co Cork that is fit for warehousing purposes. At present the group is going through the “normal planning process,” which is still at an early stage, she said.

Pernod has targeted the US and other overseas markets in its drive to boost the sales of Jameson. In the US Irish whiskey accounts for just a tiny fraction of whiskey sales there and the brand is expected to do well there in the coming years as demand for Scotch levels off.

Pernod’s sales were “buoyed by a huge outperformance in Asia” and other countries outside Europe and the Americas, UBS AG analysts said.

The shares traded up 6%, or €3.70, at €65.26, 3pm Paris time. Pernod shares have gained 8.9% this year.

Total sales in the quarter rose 14% to €1.88 billion from €1.65bn a year earlier. Organic sales of Martell cognac jumped 45% fuelling 17% growth for Pernod’s top 14 “strategic spirits and champagne brands”.

“What you’re getting is very strong growth, partly in Martell,” and from Pernod’s Royal Salute brand, which advanced 37%, Trevor Stirling, an analyst at Sanford C Bernstein in London, said yesterday.

Organic sales in Europe, excluding France, where the company gets most of its revenue, rose 2% as growth in Ukraine and Russia offset “stable” sales in western Europe.