over 3 years ago • 2 mins
Pernod Ricard’s going to regret this in the morning: the French alcohol giant – owner of Absolut vodka and Jameson whiskey – reported a huge profit hit on Wednesday 🤢
You might feel as though you’ve been knocking back more liquor than ever in your own home, but spending in two less-frequented areas – bars and duty-free stores – took a double-measure-sized dent last quarter 🥃 The drop in sales to nearly non-existent air travelers was so steep, in fact, that Pernod “wrote down” its value by $1.2 billion. In other words, it reassessed the value of its various parts and realized they – or, more specifically, former window-shopper staple Absolut – were worth less than before. And that write-down saw profit for the year through June fall 77%, with sales in the COVID-ravaged final quarter sliding by a third.
Pernod also had a headache in the form of a pre-pandemic booze industry trend: drinkers’ growing preference for smaller “craft” brands like Redbreast whiskey and Altos tequila over household names like Martell cognac 🤔 Sales of those specialty labels climbed 7%, while every other category fell. It's this shift that pushed Britain’s Diageo – Pernod Ricard’s even bigger rival – to slam down $1 billion for George Clooney’s Casamigos tequila in 2017, and then follow up last month with $610 million for a gin brand part-owned by Ryan Reynolds.
Pernod’s results might’ve looked worse for wear, but the company’s profit didn’t decline as much as it’d forecast in July, helping its shares climb almost 3%. Another struggling company pulled off the same trick on Wednesday: US department store operator Macy’s saw its shares rise after reporting a not-quite-as-dire-as-expected quarterly loss 🛍 And while Pernod is desperate for a return to normal life, Macy’s has spotted a silver lining: people are buying more jewelry and perfume as gifts now there are fewer concert tickets, cooking courses, and the like.
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