Travel retail turned in a much-improved performance as French wines & spirits powerhouse Pernod Ricard today posted a groupwide -14.6% year-on-year fall in reported third-quarter net sales (+0.1% organic) to €1,945 million.
Net sales for the first nine months ended 31 March declined -14.8% (reported) and -4.4% (organic) to €7,199 million.
Global Travel Retail (GTR) sales rose +2% on a reported basis and +11% organically.
Traveller numbers remained strong in Q3, ahead of pre-COVID levels in all regions, Pernod Ricard said.
However, GTR is now expected to be in “slight decline” for FY26, as a result of travel disruption from the Middle East conflict.
The GTR sales rebound was boosted by the resumption of Cognac sales in China duty free, following the late 2025 resolution of a long-running trade dispute between the Chinese and French governments.
Asia duty free benefitted from an active festive marketing programme celebrating Lunar New Year, with strong double-digits sell-out growth for Martell.
Europe and the Americas continue to see positive momentum in travel retail sell-out, notably through the cruise channel in the Americas.
Nine-month groupwide results were impacted by a -€515 million foreign exchange hit mainly linked to the US Dollar, Indian Rupee and Turkish Lira, and a group restructure of -€393 million linked to the disposal of wines and its Imperial Blue Indian whisky business.
The contrasting Q3 and nine-month results bear out Pernod Ricard’s observation of a sequential improvement in organic net sales in Q3 compared to H1, with total group volumes in Q3 back to growth at +4%, and with Strategic International Brands’ volumes growing +3%.
When excluding the US and China markets which contracted in Q3 by -12% and -7% respectively, Q3 organic net sales in the rest of the world grew strongly at +5%.
“Sales have improved in markets across all regions in Q3, with strong momentum in emerging markets and continued growth in several mature markets,” the company said.
Looking forward, Pernod Ricard said: “In a context that remains volatile and uncertain, we continue to see FY26 as a transition year with improving trends in H2.
“In line with our expectations, net sales strongly improved in Q3. Given the ongoing conflict in the Middle East, we now expect organic net sales to decline by -3% to -4% for the full year.
“We continue to invest to increase our brands’ desirability with sharp allocation, efficiency, innovation and experiences with A&P investment ratio expected to remain at c.16%.
“We will continue to defend our Organic Operating Margin to the fullest extent possible, supported by strict cost control and the implementation of our FY26 to FY29 €1 billion Operational Efficiencies programme, including the adaptation of our ‘fit for future’ organisation. We expect to deliver one third by the end of the fiscal year.
“Our focus on cash generation is to continue, with strategic investments now expected to be below €700 million and strong operating working capital management.” ✈
