Pernod Quarterly Sales Miss Estimates as Chinese Sales Slow

Pernod Ricard SA, France’s biggest distiller, reported third-quarter revenue that missed estimates as a slowdown in demand in over Chinese New Year outweighed better-than-anticipated results in Europe.

So-called organic sales, which exclude acquisitions, disposals and currency fluctuations, increased 6 percent in the three months ended March 31, the Paris-based company said today in a statement. That missed the 7.4 percent median estimate of 12 analysts. Nine-month sales on the same basis rose 4 percent.

“Americas and Asia disappointed,” Laetitia Delaye, an analyst at Kepler Capital Markets in Paris, wrote today. “France and Europe surprised positively.”

The performance marks a reversal of regional patterns for the distiller, which has benefited from strong demand for cognac and whisky in China amid slowing demand in Europe. The head of its Asian unit in March reported “softness” over the key Chinese New Year period, when consumers buy high-priced spirits for celebratory gifts including its Martell cognac.

Pernod fell as much as 2.9 percent in Paris trading, the most in more than a month. The stock was down 1.9 percent at 95.03 euros as of 9:18 a.m.

China Slowdown

Sales in Asia and the rest of the world rose 2 percent, missing the 5.8 percent median estimate. The company said that wholesaler depletions were “stable” during Chinese New Year. Demand for Scotch whisky was weak in South Korea and Thailand and slowed in China, it said. Diageo Plc, the world’s biggest distiller, this month reported quarterly sales that rose 4 percent in Asia Pacific as declining Scotch whisky sales in South Korea held back improvements.

“The third quarter big trends have been in line with the first half, with the exception of China where we saw some slowdown after a flat New Year in terms of consumer volumes,” Chief Financial Officer Gilles Bogaert said today by phone.

Higher-end products such as Martell’s XO range and Royal Salute whisky were more affected by a less favorable environment for gift-giving and banqueting following the appointment of a new goverment in China, but the company sees this as a largely technical effect and will continue to increase prices, Bogaert said, albeit at a slower pace than previously.

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