Pernod Ricard has said that it expects its organic sales to return to growth in the full year, after strong performances in its key US and Chinese markets helped the French spirits group beat first-half profit and sales forecasts.
Double-digit sales growth in China and a 5% sales rise in the United States propped up results for Pernod, the world's second-biggest spirits group after Diageo.
Still, Pernod said that the COVID-19 crisis will continue to weigh on duty-free sales - which slumped by 47% in the first half of its fiscal year that began on July 1 - and disrupt alcohol consumption in bars and restaurants.
Chairman and CEO Alexandre Ricard told Reuters that he expects organic sales growth in the second half to "more than offset" the 3.9% decline in the first half.
Still, there was disappointment among investors that Pernod Ricard did not commit to precise figures for sales and profit guidance for the full year.
"The sanitary situation is far from stabilised. There are lockdowns in some countries. We still have no clear view on the Chinese New Year and vaccines are taking time," Ricard told analysts.
Ricard was cautiously optimistic ahead of the Chinese New year celebrations that start on February 12, saying that he will not have "real data-driven feedback" on Chinese sales before the end of March-early April.
Pernod said that profit from current operations in the six months to December 31, 2020, reached €1.595 billion, an organic decline of 2.4% that was still better than analysts' expectations for a 7.9% fall.
This reflected tight control over costs and lower promotional spending in businesses and markets where demand was subdued such as travel retail. Advertising and promotional spending is set to increase in the second half to approximately 16% of sales for the full year.
First Half Sales
Sales totalled €4.985 billion in the first half, representing an organic decline of 3.9%, compared with analysts' expectations for a 5.4% drop.