United Spirits Q3 results: Net profit falls 11%, sales dip 4%

United Spirits Q3 results: Net profit falls 11%, sales dip 4%

United Spirits Ltd (USL), the country’s largest liquor company, said net sales fell about 4% in the third quarter ended December but demand has improved sequentially after gradual on-trade recovery.

The owner of McDowell‘s No.1 and Royal Challenge whiskey brands said net profit fell 11.16% even as gross margin rose 24 basis points, helped by benign commodities.

“The reported revenue decline of 3.6% in the third quarter reflects improving consumer sentiment over previous quarters, notwithstanding on-premise footfalls still being low, the route to market change in Andhra Pradesh and taxation led price hikes post Covid-19. Operational resilience, contextual marketing with focus on in-home occasions and renovation of our core brands supported the top-line recovery,” said Anand Kripalu, CEO of USL.

Net sales in its Prestige and Above segment – which has mid-segment and premium brands such as McDowell’s No 1, Royal Challenge, Johnnie Walker and Vat 69 – declined 0.8% partially as a result of lapping a high festive season comparative, the company said.

Net sales in the Popular segment – which has mass-market brands such as Haywards, Bagpiper and White Mischief – declined 6.7% overall led by a decline of 5.7% in priority states due to increased consumer prices impacting the demand in this price-conscious segment coupled with unfavourable state mix.

“Despite a quicker rebound than originally expected, in the near term, there are still reasons to remain cautious and consequently, the company is not providing quantitative guidance for fiscal 2021,” added Kripalu.

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