Pernod Ricard first quarter sales fall less-than-expected, cautious optimism on China

Pernod Ricard Q1 Sales Drop Less Than Expected, Eyes Growth in China and India

Financial Performance and Market Outlook

Q1 2027 Sales Overview

PARIS, Oct 15 (Reuters) - Pernod Ricard on Thursday reported a smaller-than- expected 0.9% drop in sales for the first quarter of its 2027 fiscal year, impacted by weak demand and de-stocking in China and the United States although demand in India was strong.

Performance in Key Markets

Pernod, the world's second-largest spirits maker after Diageo, said underlying trends in China were improving, confirming its cautious optimism ahead of the Chinese Mid-Autumn festival.

Pernod also reiterated a forecast for broadly stable net sales in the current fiscal year started on July 1.

Sales Figures and Regional Breakdown

• The maker of Martell cognac and Absolut vodka, which held unsuccessful merger talks with Jack Daniel's maker Brown-Forman earlier this year, reported Q1 sales of 2.234 billion euros ($2.51 billion), an organic decline of 0.9% against estimates of a 1.7% decline in a company-compiled poll of analysts.
• Sales fell 10% in the United States and 25% in China but rose 19 in India in the first quarter.

Strategic Moves and Future Plans

IPO Preparations in India

In India the group has said it was taking preparatory steps to a potential IPO. It reiterated the decision to proceed to an IPO remains subject to board approval.

Cost Control and Margin Defense

Pernod also said it will strongly defend its organic operating margin supported by strict cost control.

Growth Targets and Industry Challenges

Pernod also reiterated it expects sales growth at the lower end of its 3% to 6% target range through 2029, underscoring the prolonged downturn facing global spirits makers.

Spirits makers across the industry are grappling with a multi-year sales downturn that has eroded valuations, triggered management changes and prompted asset sales and cost-cutting.

Additional Information

($1 = 0.8917 euros)

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