Pernod Ricard, the renowned French drinks company, is scheduled to announce its financial results for the first half of fiscal year 2024 on Thursday. Here is a breakdown of what you should know:

Sales Expectations

According to a Visible Alpha poll of estimates from 11 analysts, it is projected that Pernod Ricard will post revenue of 6.59 billion euros ($7.10 billion) for the six-month period ending in December. Comparatively, in the same period of the previous year, the company recorded sales of EUR7.12 billion.

Net Profit Forecast

Visible Alpha predicts that Pernod Ricard will report a net profit of EUR1.45 billion for the first six months, which is down from EUR1.79 billion in the previous year.

Stock Performance

Over the past year, shares in Pernod Ricard have experienced a decline of approximately 18%. However, on January 26th, the stock saw a surge after Remy Cointreau, a fellow industry player, reassured investors by affirming its 2024 outlook. This provided a sense of relief amidst the challenging landscape faced by European drinks makers.

Factors to Monitor

Investors will likely pay close attention to the potential impact of the anti-dumping investigation initiated by the Chinese government in January concerning brandy imported from the European Union. Deutsche Bank analysts previously noted that this measure could negatively affect the performance of European drinks makers.

Furthermore, although the industry experienced positive trends during the pandemic, it is now facing a slowdown due to high inventories and a challenging environment in China. Economic difficulties are dampening consumer sentiment in the region. Citi analysts have expressed concerns about Pernod Ricard's potential ongoing weakness in the United States due to inventory depletions.

Uncertainties Ahead

Due to uncertainties in China, such as domestic economic challenges and the anti-dumping investigation, as well as muted trends in the United States, Citi analysts believe that Pernod Ricard may deviate from its guidance for fiscal 2024. The company aims for net sales growth to fall within the 4%-7% range and an increase in operating margin of 50 to 60 basis points between 2023 and 2025.

Leave Comment