Pernod Ricard forecasts strong profit growth for full year

Pernod Ricard up 19.1% for last quarter

Pernod Ricard (EPA:RI), the French alcoholic beverages company, said on Thursday that it expects 10% organic profit growth in the fiscal year 2020/21 as strong demand in key markets – the US and China – have helped the firm surpass its Q3 estimates.

The brand that owns Absolut vodka and Martell cognac is anticipating a surge in sales in Q4 as pubs and bars begin to reopen, although travel retail is expected to remain limited.

The Pernot Ricard share price is up by 1.96% to €176.50 midway through the morning session on Thursday.

“Management guidance for 10% organic EBIT growth in FY21E is significantly better than the market expected and compares to current consensus of 7.1%,” Citi analysts wrote in a note.

Pernot announced sales of €1.955bn in the next three months to March 31, up 19.1% compared to the year before, and outdoing expectations of 11.3%.

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After two consecutive quarters of decline, the performance confirmed a return to growth for the CAC 40 company’s sales.

Sales for the first nine months reached €6.941bn, an organic growth of 1.7%, with sales in the United States continuing to grow at a mid-single digit pace, as stuck-at-home consumers splurged on Glenlivet scotch and American whiskeys while a cocktail craze boosted demand for Malibu rum and Kahlua liquors and tequila.

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