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* Pernod under pressure from investment group Elliott
* Q1 sales up 1.3% on underlying basis
* China and India show signs of slowdown
(Adds detail and background)
By Dominique Vidalon
PARIS, Oct 17 (Reuters) - French spirits maker Pernod Ricard
, which is being targeted by activist investor Elliott,
posted a 1.3% rise in first-quarter underlying sales, reflecting
slower growth rates in China and India.
In August Pernod, the world's second-biggest spirits group
behind Diageo, indicated it expected a relatively soft
first quarter, citing a very high year-ago comparison basis in
Asia.
For the first quarter ended Sept. 30, Pernod reported sales
of 2.483 billion euros ($2.75 billion), marking a like-for-like
rise of 1.3%. This compared with a growth rate of 10.4% in the
year-ago quarter.
The owner of Mumm champagne, Absolut vodka and Martell
cognac said that despite an uncertain environment, it was
keeping its forecast for a 5-7% organic rise in full-year profit
from recurring operations after last year's 8.7% growth.
In the first quarter alone, sales growth reached 6% in China
compared to 27% in the year-ago quarter, reflecting notably a
decline in Chivas sales due to challenging market conditions.
Martell cognac sales in China benefited from a price rise
but sustainable inventory management weighed on volumes, said
Pernod.
Its United States arm fared better and made a good start,
delivering 6% sales growth in the first quarter.
Pernod Ricard is under pressure from U.S. hedge fund
Elliott, which has a 2.5% stake, to improve profit margins and
corporate governance.
In February, Pernod vowed to lift its margins and
shareholder returns under a three-year strategic plan that
Elliott has described as a first small step.
Earlier this month, Pernod Ricard said it would cut about
280 jobs through a voluntary redundancy programme as part of a
plan to merge its two French distribution subsidiaries Ricard
and Pernod.
The company also said it would sell the Cafe de Paris
sparkling wine brand and its Cubzac production site to InVivo
Wine.
($1 = 0.9030 euros)
(Reporting by Dominique Vidalon;
Editing by Sudip Kar-Gupta)
