REFILE-Pernod Ricard cuts profit goalm blames China weakness

Thu Feb 13, 2014 2:14am EST

(Fixes spelling of text at bottom of story)

PARIS Feb 13 (Reuters) - French spirits group Pernod Ricard cut its annual profit growth goal on Thursday as it warned demand in China, its second-largest market, would remain weak throughout its fiscal year ending in June.

The world's second-biggest spirits group behind Britain's Diageo, which previously expected demand in China to start recovering from the second half of its financial year, said it remained confident over the medium and long-term potential of China.

The owner of Mumm champagne, Absolut vodka and Martell cognac said it now eyed a rise of between 1 percent and 3 percent in full year underlying operating profit against an October forecast of 4-5 percent growth.

A Reuters poll of six analysts had showed Pernod Ricard was seen on course for a 2.3 percent growth in underlying operating profit.

First-half underlying sales were flat at 4.570 billion euros, reflecting an 18 percent sales fall in China, while underlying operating profit rose 2 percent to 1.359 billion euros, thanks mostly to cost control.

Pernod Ricard makes 12 percent of its sales in China, its second-biggest market behind the United States, but like rivals Diageo and Remy Cointreau it has been hit by a Chinese government crackdown on luxury gift-giving and personal spending by civil servants, as well as slowing economic growth in the world's second-biggest economy.

(Reporting by Dominique Vidalon; Editing by Andrew Callus)

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