Shares in Pernod Ricard, the French drinks company, saw a significant increase on Thursday as the company reaffirmed its growth targets for the upcoming year, despite a decline in sales during the first quarter.
At 0831 GMT, shares traded 4.7% higher at EUR166.10.
During the first quarter of fiscal 2024, which ended in September, the group reported sales of 3.04 billion euros ($3.20 billion). This represents an 8% decrease compared to the previous year in reported terms and a 2% decrease organically. The decline can be attributed to anticipated decreases in the Americas and China.
Although the first-quarter results were in line with expectations, Citi analysts noted that the company remains optimistic about its sales momentum improving throughout fiscal 2024. They expect positive organic sales growth in both the U.S. and China.
Citi added, "We anticipate minimal changes to consensus estimates today. Investor focus will be on management comments regarding Mid-Autumn Festival off-take trends and wholesaler stock levels in China, as well as whether U.S. inventory adjustments are complete."
Jefferies analysts Edward Mundy and Andrei Andon-Ionita also expressed optimism, stating that the positive outlook in the U.S. and China, along with strong growth in travel retail and India, should be well-received. They believe that this indicates the U.S. and China will accelerate to at least 3% for the remainder of the fiscal year.
"This should be sufficient for gentle outperformance today," Jefferies commented.
