PARIS (Reuters) – Pernod Ricard said on Thursday it was targeting annual growth in its turnover despite a decline in sales in the first quarter linked to a slowdown in the United States and China.

On the Paris Stock Exchange, the wine and spirits group’s shares climbed 3.59% to 164.30 euros around 08:00 GMT, at the top of the CAC 40 which fell at the same time by 1.15%.

During the first quarter, Pernod Ricard’s turnover stood at 3.042 billion euros, down 8% and 2% in internal data.

In China and the United States, sales fell by 8% due to an unfavorable basis of comparison. Chinese demand remains “moderate” in a “difficult” macroeconomic context and the American market is experiencing normalization after a jump in demand following the end of the COVID-19 pandemic.

Pernod Ricard had already warned at the end of August of a “more modest start” to the first quarter, after a better than expected 2022-2023 financial year, due to the slowdown in these two markets.

In a note, JPMorgan analysts emphasize that the decline in the United States and China is in line with expectations.

The group’s CEO, Alexandre Ricard, said he expected improvement during the year, with a favorable outlook in the four key markets – the United States, China, India and travel retail. .

The manager added that he was “confident in our ability to deliver diversified growth in turnover over the 2023/24 financial year”.

The group also reiterated its medium-term outlook, namely internal sales growth at the top of a range of between +4% and +7%.

Several analysts, however, question China’s prospects.

“The big uncertainty concerns China,” underlines Trevor Stirling, analyst at Bernstein.

Pernod Ricard’s performance should improve in the country with a more favorable basis for comparison, but it is difficult to say to what extent the economic environment will improve, he emphasizes.

“We continue to see downside risks to our guidance for the 2023-2024 financial year as we expect a strong recovery in the second half of the year, which could prove optimistic given the current uncertainty over the growth outlook for industry in the United States and China”, observe JPMorgan analysts.

In an interview with Reuters, Pernod Ricard’s financial director, Hélène de Tissot, indicated that the group had observed an improvement in consumption in China in September but judged that it was too early to say whether this trend was sustainable.

(Written by Blandine Hénault, with Dominique Vidalon, edited by Jean-Stéphane Brosse)

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