Pernod Ricard sales fall 3.9% as US, China demand weakens

Pernod Ricard reported FY 2026 organic sales down 3.9%, missing the 3.7% consensus decline, as demand collapsed in its two largest markets.

"The assumptions that drive that kind of outlook are based on a U.S. market which is not in growth over that period and which is quite soft," CEO Alexandre Ricard told Reuters.

U.S. sales fell 14 percent and China dropped 19 percent in the year ended June 30. The maker of Martell cognac and Absolut vodka now expects sales growth at the lower end of its 3-6 percent target range through 2029, and forecasts broadly stable organic net sales for the current fiscal year that began July 1.

Shares fell more than 6 percent as Ricard told investors the U.S., Pernod's largest market, offered little growth potential over the next three years. The company held unsuccessful merger talks with Jack Daniel's maker Brown-Forman earlier this year.

Bernstein analyst Trevor Stirling said there was no "massive surprise" in the results, given Pernod's performance and guidance were in line with expectations and peers. Diageo, the world's largest spirits maker, said earlier this month the U.S. market would remain negative for the next three years.

Pernod expects to complete its €1 billion ($1.2 billion) restructuring program a year ahead of schedule and has cut roughly 3,600 jobs since its 2024 financial year. India has overtaken China as Pernod's second-largest market, and Ricard told investors the board was discussing a potential initial public offering of the Indian business, with preparatory steps already taken.

The guidance cut signals management expects the global spirits downturn to persist through the decade. Investors will watch for updates on the India IPO and the first-quarter trading update for signs of stabilization in U.S. and Chinese demand.

This article is for informational purposes only and does not constitute investment advice.