PARIS, Oct 19 (Reuters) - French spirits maker Pernod Ricard on Thursday forecast higher sales in fiscal year 2023-24 despite reporting an expected 2% drop in its first-quarter sales due to weaker consumer demand in China.
The soft start to the year also reflected inventory adjustments in the United States at retailer level and high year-ago comparables in both countries.
Pernod, the world's second-biggest spirits group behind Diageo, said its organic sales growth for the fiscal year that started July 1 would be "broad-based and diversified", with a positive outlook in the United States and China and strong growth in travel retail and India sales.
Easing inflationary pressures, a focus on operational efficiencies and cost control would help operating margin expansion in the full year, it said.
Pernod - which owns Martell cognac, Mumm champagne and Absolut vodka - reported sales of 3.042 billion euros ($3.20 billion) from July to September, a like-for-like decline of 2%, slightly better than an analyst consensus for a 2.6% drop.
Sales fell 8% each in the United States and China in the first quarter.
"As expected we experienced a soft start to the year, yet I am encouraged we have largely offset declines in the U.S and China this quarter, thanks to our good performance in other markets," Chairman and CEO Alexandre Ricard said in a statement.
Pernod Ricard said it remained confident over its mid-term goals for its financial years 2023-2025 , aiming for the upper end of a 4%-7% net sales growth range and a 50-60 basis point increase to its operating margin.
($1 = 0.9494 euros)
Reporting by Dominique Vidalon; Editing by Muralikumar Anantharaman and Sherry Jacob-Phillips
Source: Reuters