PARIS (Reuters) – French spirits maker Pernod Ricard said on Thursday it was suspending its remaining share buy back of up to 500 million euros ($541 million) and tightly managing costs in response to the coronavirus epidemic that has slashed third quarter sales by 14.5%.
Pernod Ricard, which owns Mumm champagne, Absolut vodka and Martell cognac, reiterated its revised March guidance of an organic decline of around 20% in full year current operating profit as a result of the slump in business sparked by the crisis.
“We are staying the strategic course while implementing a comprehensive action plan to mitigate costs and tightly manage cash,” Chief Executive Alexandre Ricard said in a statement.
“Thanks to our solid fundamentals and strong liquidity position, I am confident in Pernod Ricard’s ability to bounce back from today’s challenges to achieve its growth potential.”
Pernod Ricard reported sales of 1.736 billion euros in the three months to March 31, a 14.5 percent fall on a like-for-like basis.
Over nine months, sales declined 2.1%, reflecting a 13% fall in global travel retail and an 11% fall in China sales.
The biggest international spirits maker in China and the world’s second-biggest behind Diageo, had warned in February it expected the coronavirus outbreak that shut bars and clubs in China to have a severe impact on its third quarter sales.
In March, it updaded its guidance, warning of a hit of around 20% to full year current operating profit as a result of the slump in business as the coronavirus crisis went global.
($1 = 0.9236 euros)
(Reporting by Dominique Vidalon and Raju Gopalakrishnan)