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French spirits maker Pernod Ricard said it still expected to return to sales growth in the 2024/25 fiscal year despite reporting a worse-than-expected 5.9 per cent fall in first quarter sales, caused partly by weakness in China.
Pernod's first quarter sales drop came amid weak consumer demand in China and persistent challenges in the United States where retailers and wholesalers continued to cut back on pricier spirits stocks while weakness in China spread to Asia travel retail.
Pernod, the world's second-biggest spirits group behind Diageo, was reporting the quarterly figures one week after China imposed temporary anti-dumping measures on brandy imports from the European Union.
That move has added to worries about the Chinese economy, which has been weighing on consumer demand, and it translated into a 26 per cent fall in sales in China for Pernod in the quarter.
Pernod Ricard said it was working to mitigate the impact of the Chinese anti-dumping decision on the group's performance but did not provide details.
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Pernod - which owns Martell cognac, Mumm champagne and Absolut vodka - reported sales of 2.783 billion euros ($3.02 billion) from July to September, a like-for-like decline of 5.9 per cent, worse than an analyst consensus for a decline of 4.8 per cent.
Pernod Ricard's fiscal year started on July 1.
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