Pernod Ricard said it now believes the coronavirus will lead to a drop in profit from recurring operations of about 20% this fiscal year.
That takes into account the fact that business was very limited in China in February and March and projects a slow recovery beginning in April, an 80% decline in travel retail from February through June, a 10% drop in off-premise sales in other markets and no on-premise sales from mid-March through June “as outlets are shut or not reordering.”
“The environment has very significantly deteriorated due to the COVID-19 outbreak, said Alexandre Ricard, chairman/CEO. “We are encouraged to see that, thanks to the implementation of strong measures, China appears to be starting to make a gradual recovery.
“While we cannot predict the duration and extent of the impact, we remain confident in our strategy. Our priority is to ensure the health and safety of our employees and business partners. We are staying the strategic course while implementing a comprehensive action plan to mitigate costs. Thanks to our solid fundamentals, rooted in employee engagement and the quality of our portfolio, I am confident in Pernod Ricard’s ability to bounce back and its growth potential.”