French spirits maker Pernod Ricard has said that it does not expect its sales to rise until next year as second-wave COVID-19 lockdowns are likely to hit its business heavily during the last three months of 2020.
Pernod, which is the world's second largest spirits company after Diageo, said that sales rebounded during the three months to September 30 after a torrid previous quarter, but were still down 6% from a year earlier at €2.236 billion.
"We expect a second quarter that will be heavily impacted by the COVID crisis. There is a second wave of infections in Europe and new restrictions in France, even lockdowns in Ireland, Britain," CEO Alexandre Ricard told Reuters.
Pernod's fiscal year starts on July 1. While down from a year earlier, its first-quarter sales beat analyst expectations for a 13% drop and were a marked improvement on a 36.2 % slump in the three months to June 30 as strict lockdowns kicked in.
Like its rivals, Pernod has been hit hard by the pandemic, which has led to closures of bars, restaurants and night clubs in many countries and worldwide travel restrictions. When venues have reopened, strict social distancing, early closing times and reduced capacity have all kept a lid on sales.
Ricard also that said duty-free sales will not recover during the company's current financial year due to continued travel restrictions and are likely to show a double-digit decline.
Travel retail sales, which make up 6% of group sales, fell by 64% during the three months to September 30.
China And US Sales
In China, which contributes 9% of Pernod's sales and is its second largest market after the United States, sales rose by 4% during the quarter, helped by the reopening of bars and restaurants and strong demand ahead of the country's Mid-Autumn festival.
Approximately 90% of China's bars, restaurants and clubs had reopened and, while business was not yet back to pre-pandemic levels, customers were prepared to spend more, Ricard told Reuters.
US sales rose by 6%, also benefiting from good orders ahead of the festive season and strong consumption in homes.
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