French drinks group Pernod Ricard, which is being targeted by activist hedge fund Elliott, has said it is on track to achieve its medium-term goal of mid-single digit sales growth in the United States, which is its top market.
Last week, Elliott disclosed a stake of just over 2.5% in Pernod Ricard and called on the family-backed company to boost profit margins and improve returns for investors.
Elliott also said Pernod had lost market share across key segments of its brand portfolio, but Pernod rebutted this criticism as it held an investor presentation.
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Pernod has reiterated that its medium-term objective remained to stabilise its Absolut vodka brand in the United States. Meanwhile Jameson Irish whiskey will continue to grow at double-digit rates, it added.
Underlying Sales Growth
In the United States, where Pernod makes 19% of its sale, the group has achieved underlying sales growth of 4 percent in fiscal year 2017/18, broadly in line with the growth of the US market.
Pernod Ricard's largest brand Absolut vodka has, however, struggled in the US amid competitive price pressures and as trendy drinkers have turned to spirits such as bourbon and niche vodka brands like Texas-based Tito's Handmade vodka.