Leading drinks group Pernod Ricard today reported net sales of €10,959 million in its financial year to 30 June, down -5.5% year-on-year and -3% on an organic basis.
The Global Travel Retail business posted a -13% fall in sales year-on-year, with organic sales hit by the suspension of Cognac imports to the China duty-free market since December 2024. The recent resolution of this issue, with the resumption of Cognac shipments to China duty free from financial Q2 (calendar Q4) pointing to a “gradual improvement in outlook” said the company.
The Asia travel retail market was also negatively affected by weakness in South Korea and Taiwan while Europe and the Americas showed growth.
Travel retail is expected to return to growth in this financial year, with a decline anticipated in Q1 due to a high comparison with last year, but with Q2 to benefit from the resumption of Martell sales in particular in China travel retail.
Among other key markets for Pernod Ricard, sales in the Americas declined by -3% with the USA down -6% year-on-year. The group noted that the US spirits market (including RTD) is “in slight growth, impacted by subdued consumer confidence and economic moderation”.
Sales in China fell -21% against a backdrop of weak consumer sentiment, with declines in Martell and Scotch brands, though Jameson, Absolut and Olmeca showed strong growth.
India grew +6%, with a “strong and broad-based performance underpinned by dynamic consumer demand”.
Europe posted a -2% fall in net sales, with Eastern Europe strong, France in growth but Germany and Spain showing declines.
The group’s Strategic International Brands slipped -4% in net sales terms, with Jameson sell-out stabilising in the USA while declining in Western Europe, Martell showing a sharp decline in China though with stable market share, and Absolut growing in all regions, except Western Europe due to decline in Germany.
The Scotch portfolio showed a slight decline due to performance in the USA, Germany, South Korea and Taiwan markets, with growth across other markets.
Profit from recurring operations reached €2,951 million, an organic decline of -0.8% and a reported decline of -5.3% year-on-year.
Group share of net profit hit €1,626m, up by +10% with non-recurring costs much lower than in FY2024.
Pernod Ricard also noted its programme of efficiencies, with €900 million delivered from FY2023 to FY2025 and €1 billion targeted from FY2026 to FY2029.
On the outlook, the group said in a statement: “FY26 is expected to be a transition year with improving trends in organic net sales, skewed toward H2.
“A decline in Q1 is expected, with distributor inventory adjustment in the US, continued soft consumer demand and inventory adjustment in China, the impact of Maharashtra excise policy changes in India, skewed toward Q1 and sales of Cognac in Duty Free China only resuming from Q2.”
From FY2027 to 2029 the group is projecting organic net sales growth in the range of +3% to +6% a year on average, with annual organic operating margin expansion. ✈
