French liquor group Pernod Ricard SA said Thursday its profit for fiscal 2017 rose 13%, reflecting strong sales in the U.S., an improvement in China and tight cost-control.
The owner of Absolut vodka and Jameson whisky said net profit for the fiscal year ended June 30 rose to 1.39 billion euros ($1.65 billion).
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But the company's profit from recurring operations, the profitability measure analysts and the company often use, came in at EUR2.39 billion, below analyst expectations of EUR2.42 billion. The company also said it expects currency headwinds to weigh on profit next year.
Pernod shares dropped 3.7% in morning trading.
Fourth-quarter revenue for the world's No. 2 drinks conglomerate after Diageo PLC rose 5%, driven by the U.S., a return to growth in China, Eastern Europe and global travel retail. Organic revenue growth, which strips out currency effects and acquisitions, was at 3% for the quarter, the company said.
Sales in its Americas, dominated by the U.S. market, rose 6% in the quarter, while sales at its Asia-Rest of World regions increased 5%. In its home region of Europe, sales rose 2%.
However, India remained weak. Sales in the country, which was formerly a major driver of growth, rose just 1% over the year. Sales growth in India has slowed after an Indian government ban on high-value bank notes held back local whisky consumption. The Indian government also banned liquor sales near major highways to curb drink-driving.
The company--which also gave investors a 7% dividend rise--set a target for a 3%-5% increase in profit from recurring operations for its 2018 fiscal year.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
August 31, 2017 06:07 ET (10:07 GMT)