Global drinks giant Pernod Ricard has reported a 14.5% decrease in organic third-quarter sales, revealing financial damage already caused by COVID-19.
A large chunk of this decline occurred in January and February in China and global travel retail, as the spreading virus shut down those areas of the world. In China — a preview of what’s now affecting America — Pernod Ricard reported a “severe decline” in sales impacted by on-premise closures.
As the pandemic lessened in China, however, Pernod Ricard saw a “slow recovery, with outlets opening progressively, but physical distancing impacting venue traffic.”
In America, Pernod Ricard got off to a good start in 2020, led primarily by Jameson, The Glenlivet, Malibu and specialty brands like Monkey Shoulder, Altos, Lillet, Del Maguey, Redbreast and Aberlour. Then sales growth slowed in March, due to “confinement and physical distancing measures in most states.”
Jameson numbers were further affected by St. Patrick’s Day cancellations.
The France-based company says that it has placed priority on employee and business partner health and safety during this crisis. The company has also begun manufacturing components of hand sanitizer.
Pernod Ricard has suspended its stock buyback program during 2020.
“Our business model and strategy are resilient,” says Alexandre Ricard, Pernod Ricard chairman and CEO. “Performance in H1 through the start of Q3 was solid . . . Since then, the Covid-19 pandemic has led to a significant deterioration of the environment across the globe. I would like to praise the exemplary behaviour of our teams and their impact on their respective communities around the world at this very difficult time.”
“Under current assumptions of the impact of Covid-19, we are confirming our guidance of an organic decline in profit from recurring operations for full-year FY20 of around -20%,” he adds. “We are staying the strategic course while implementing a comprehensive action plan to mitigate costs and tightly manage cash. Thanks to our solid fundamentals and strong liquidity position, I am confident in Pernod Ricard’s ability to bounce back from today’s challenges to achieve its growth potential.”