Pernod Ricard lifts hopes for recovery after hit from US, China

By Dominique Vidalon

PARIS (Reuters) - Pernod Ricard shares rose as much as 8% on Thursday after the French spirits maker said it was expecting sales to improve in fiscal 2026, though the first quarter would still be hit by weak consumer demand and de-stocking in China and the United States.

There was also relief that global tariffs agreed in July would deal a lower-than-expected blow to Pernod's business while overall, results for the year ended June 30, 2025 were better-than-expected.

The world's second-biggest Western spirits maker, said that 2026 would be a "transition year", with improving sales trends skewed towards the second half.

Chief Executive Alexandre Ricard told Reuters the 2026 fiscal year would show an improvement from the previous year, when sales fell 3% on an organic basis, though it was too early to be more specific.

"We will do better for the year than this year," he said.

The company now expects an 80 million euros annualized ($93.66 million) impact from tariffs imposed by the United States and China, against 200 million previously, he said.

At 1010 GMT, Pernod shares were up 5.16% at 104.35 euros, having lost 9% so far this year.

"Whilst visibility on the exact timing of recovery is low, we think a lot of bad news is in the price," Jefferies analysts said.

Pernod Ricard and its rivals have suffered amid falling sales and tariff uncertainty in the key markets of China and the United States. Tariff deals were reached in July.

Pernod - which has launched a restructuring plan to cut costs - reiterated its guidance for between 3% and 6% annual organic sales growth for 2027-2029, along with annual organic margin expansion.

Sales reached 10.959 billion euros ($12.83 billion) in the twelve months to June 30, representing an organic decline of 3%.

Profit from recurring operations stood at 2.951 billion euros, marking an organic decline of 0.8%.

This was better than analysts expectations of a 3.2% sales fall and a 3.1% profit fall, Jefferies noted.

The maker of Absolut vodka and Jameson whiskey said sales declined by 6% in the United States.

Prolonged tariff uncertainty led distributors to boost inventory levels at the year-end, with adjustments expected throughout the 2026 fiscal year, it added.

In China, Pernod's annual 2025 sales fell 21% as weak consumer demand and the looming conclusion of an anti-dumping investigation led to an overhang in distributor inventories.

Pernod added this meant it was forecasting a sharp decline in sales in China in the first quarter of 2026.

($1 = 0.8542 euros)

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Elaine Hardcastle)