Pernod Ricard Warns of Ongoing Sales Decline in China and US for Q1 2026
Financial Performance and Market Outlook
By Dominique Vidalon
Fiscal Year 2026 Results
PARIS, Aug 27 (Reuters) - French spirits and wine group Pernod Ricard reported a worse-than-expected 3.9% organic sales decline in its fiscal year 2026 on Thursday, hit by persistent weak demand in the U.S. and China and disruption to tourism from a prolonged conflict in the Middle East.
This was Pernod Ricard's third consecutive year of sales decline and recovery prospects for the current year that started on July 1 looked muted.
Outlook for Q1 2026
Pernod, the second-largest spirits group behind Diageo, predicted organic net sales to be broadly stable, with the U.S. and Chinese markets still hit by inventory adjustments in the first quarter.
Medium-Term Guidance
The maker of Martell cognac and Absolut vodka also trimmed its medium-term sales growth guidance, citing current weakness in the U.S. market.
It is now projecting organic net sales growth to be on average closer to the lower end of a 3% to 6% sales growth range between 2027 and 2029.
Challenges in Key Markets
Spirits companies are battling a multi-year slump in sales that has prompted valuations to slide, CEOs to exit and companies to sell assets and cut costs. In the key U.S. and Chinese markets, sales have dropped amid tariff threats, destocking and a sluggish Chinese economy.
Pernod Ricard said sales declined by 14% in the United States and 19% in China as a weak economic climate and regulatory measures hit demand for prestige brands, notably Martell.
Group Sales and Profit
Overall group sales reached €9.4 billion ($10.96 billion) in the 12 months to June 30, 2026, representing an organic decline of 3.9% which was worse than the 3.7% contraction expected by analysts, according to a company-compiled consensus.
Profit from recurring operations stood at €2.42 billion, marking an organic decline of 5.2%, which was better than the 5.9% fall expected by analysts.
Dividend and Currency Note
Pernod kept its 2026 dividend stable at €4.70 per share.
($1 = 0.8580 euros)
(Reporting by Dominique Vidalon, Editing by Inti Landauro and Tomasz Janowski)
