French spirits group Pernod Ricard reported a bigger-than-expected decline in third-quarter sales but said it was confident of delivering a strong performance over the 2022/2023 full year, helped by "very strong" sales in the fourth quarter.
Pernod, the world's second-biggest spirits group after Diageo (DGE.L), said that it expected consumer demand to recover further in China post COVID restrictions in the fourth quarter. It also banked on more favourable comparables in the United States and China, where it planned further price increases.
The owner of Mumm champagne, Absolut vodka and Martell cognac predicted organic growth of some 10% in profit from recurring operations in its full financial year ending June 30, with some expansion in operating margin.
It reported sales of 2.391 billion euros ($2.64 billion) in the three months to March 31 - a 2.2% decline on a like-for-like basis, which was below analysts' expectations of 0.5% growth.
The third-quarter performance reflected high year-ago comparables in the United States and soft demand for Martell cognac during the festive season in China. Martell sales, however, rebounded strongly in March, it said.
Sales for the nine-months reached 9.507 billion euros, a like-for-like rise of 7.6%. This followed a 12% organic sales growth in the first-half of the year.
Pernod Ricard's fiscal year starts on July 1.