Pernod Ricard cautions of slower growth after stellar first-quarter

By Dominique Vidalon

PARIS (Reuters) - Spirits group Pernod Ricard posted a stronger-than-expected 10.4 percent rise in first-quarter underlying sales, helped by higher demand in China and India and despite slower growth in its main market in the United States.

Pernod, the world's second-biggest spirits group behind Britain's Diageo, however cautioned sales growth would moderate in the full year, notably for its Martell cognac in Asia.

It also warned of a slightly negative foreign exchange impact on its recurring operating profit.

For the first quarter ended Sept. 30, Pernod reported sales of 2.387 billion euros ($2.74 billion), a like-for-like rise of 10.4 percent that beat analysts' estimates for 7.4 percent like-for-like growth in an Inquiry Financial poll for Reuters.

Pernod said it benefited from strong demand in China and from a low year-ago comparison in India, where it has faced setbacks including a ban on liquor outlets.

The group, whose brands include Absolut vodka and Jameson whiskey, said sales in India rose 34 percent in the quarter, having previously risen 14 percent in its past financial year.

In China, sales rose 17 percent last year and leapt to 27 percent in the first quarter, led by strong demand for Martell across all price segments and by double-digit growth in Chivas whisky.

Pernod said it would benefit in the first half from the earlier timing of the Chinese New Year, but growth would then moderate as Martell would come back in line with its medium-term high single digit volume growth target.

In the United States, where sales were up 2 percent in the quarter, Jameson whiskey continued its double-digit growth but the Absolut vodka brand was still in decline.

Pernod tied the overall slower growth in the U.S. to various shipment phases, but said the underlying trend remained broadly in line with the market, which was growing by 4 percent.

Pernod said that despite an uncertain geopolitical and monetary environment, it was keeping its forecast for a 5-7 percent organic rise in full-year profit from recurring operations after last year's 6.3 percent growth.

($1 = 0.8697 euros)

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)