Pernod Earnings Beat Estimates on Jameson, Asian Reboundby
Jameson sales on track for eighth year of double-digit growth
Asian sales rise in second quarter, first gain in a year
Pernod Ricard SA, the world’s second-largest distiller, reported first-half earnings that beat estimates as sales of Jameson whiskey extended a seven-year surge and revenue in Asia rebounded.
Profit from recurring operations rose 4 percent on an organic basis to 1.5 billion euros ($1.6 billion) in the six months through December, the Paris-based maker of Absolut vodka and Beefeater gin said Thursday. Analysts expected 1.47 billion euros.
Jameson sales rose 20 percent, on track for an eighth year of double-digit growth, as the spirit becomes more popular in classic cocktails. Irish whiskey’s upswing has led Diageo Plc, Pernod’s larger rival, to start up a new high-priced brand called Roe & Co. Meanwhile, sales in Pernod’s Asian region returned to growth in the second quarter for the first time in a year, as retailers stocked up on Martell cognac ahead of Chinese New Year celebrations.
“All the planets are aligned” for Jameson, Chief Financial Officer Gilles Bogaert said in an interview. In October he said the brand’s annual shipments could eventually rise to 5 million cases from 3 million. “We are confident in growing in value by double digits in the U.S. in the coming years.”
Pernod Ricard could seek further bolt-on deals, Bogaert also said. The company has acquired small-batch liquors including Smooth Ambler bourbon and Monkey 47 gin while divesting its Domecq brandies and Paddy whiskey in the last two years.
The stock was little changed of 9:24 a.m. in Paris after Chief Executive Officer Alexandre Ricard said the third quarter faces a comparison with a strong period last year.
Revenue from rival Remy Cointreau’s cognac arm rose 22 percent on an organic basis in the final three months of 2016, buoyed by shipments to Asia, the maker of Remy Martin said last month.
Other highlights include:
- Pernod repeated forecast for earnings to rise 2 percent to 4 percent in 2017
- Martell is about 75% of Pernod’s China sales, according to CFO Gilles Bogaert
- Bogart said difficult to determine outlook for Havana Club rum in U.S. amid uncertainties in U.S.-Cuban relations