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Pernod Ricard (LSE:0HAT) anticipates a return to organic growth in the upcoming financial year, following a slight decline in sales for the year ending 30 June. The French distiller, known for brands such as Absolut Vodka, Beefeater, Havana Club, and Jameson, reported net sales of €11.6 billion for the past year, reflecting a 1% organic decline. Reported sales decreased by 4%, impacted by a €784 million negative effect from currency fluctuations.
Chairman and CEO Alexandre Ricard described the results as "robust" given the backdrop of "economic and geopolitical uncertainty and the normalization of the spirits market after two years of exceptional growth post-pandemic." Despite the overall decline, Pernod Ricard observed a sequential recovery in volume during the second half of the year across most markets.
The company's focus on pricing, operational efficiencies, and cost control led to a 108 basis point improvement in the organic gross margin, contributing to a 1.5% increase in profit from recurring operations, which reached €3.12 billion.
Looking ahead to the financial year ending June 2025, Pernod Ricard forecasts an improvement in net sales on an organic basis, driven by continued volume recovery. Organic operating margins are projected to remain stable. However, the company anticipates a challenging first quarter, with inventory reductions in the US and a persistently weak economic environment in China. Conversely, a positive performance is expected in other global markets.
Pernod Ricard's medium-term goals remain unchanged, aiming to achieve the upper end of its 4-7% organic net sales growth guidance and a 50-60 basis points expansion in operating margin. The company's shares saw a 1.2% increase, reaching €130.15, by 0905 in Paris, reflecting cautious optimism in response to its strategic outlook.
