The Ricard logo at the Ricard manufacturing unit in Lormont
Pernod Ricard shares climb on the Paris Stock Exchange on Thursday despite the spirits manufacturer lowering its annual sales outlook and its share buyback program, penalized by China and the United States.
On the Paris Stock Exchange, Pernod Ricard shares rose 4.69% to 162 euros at 09:47 GMT.
The world’s number two in the spirits sector, after Diageo, said it now expected revenue for the year to be “broadly stable” while previously targeting growth.
It will also buy back 300 million euros worth of shares this year, compared to 500 to 800 million euros previously planned.
The group which owns Martell cognac, Mumm champagne and Absolut vodka, however, said it was confident of an improvement in its results in the second half of its fiscal year.
“Four months before the end of the financial year, we have a little more visibility on how we can finish,” said CEO Alexandre Ricard.
The group was banking on signs of improvement in two of its largest markets, the United States and China, but American distributors instead continued to reduce their spirits stocks as high interest rates pushed up prices. costs.
In China, difficult economic conditions weighed on consumer demand ahead of the Lunar New Year.
Revenue fell 7% in the US in the July-December period and 9% in China, while all but two of its strategic international brands also recorded declines. negative results globally.
U.S. stocks are so tight in some cases that liquor shortages are possible. In China, however, the company has yet to see any impact from competition authorities’ investigation into wine spirits imported from the European Union, such as cognac.
According to Edward Mundy, analyst at Jefferies, the stock should recover as the group approaches the bottom of the wave and while the shares are inexpensive given Pernod’s medium-term potential.
Pernod also maintained its revenue growth forecasts of 4 to 7% in the medium term, while some feared they could be revised downwards.
The group reported a turnover down 3% to 6.59 billion euros in the first half of its 2023/24 financial year, which was in line with expectations. Current operating income (ROC) showed an internal decrease of 3% to 2.14 billion euros, against estimates of 5.1%.
(Reporting Dominique Vidalon in Paris and Emma Rumney in London, French version Kate Entringer)