Pernod Ricard Sales Drop 14.3% in First Quarter but Beat Market Expectations

Pernod Ricard, the French spirits group and the world’s second-largest producer of wines and spirits, reported sales of 2.384 billion euros for the first quarter of its 2026 fiscal year. This figure represents a 14.3% decrease compared to the same period last year in absolute terms, and a 7.6% decline on an organic basis. The company attributed part of this drop to unfavorable currency effects, which had a negative impact of 143 million euros, mainly due to fluctuations in the U.S. dollar, Indian rupee, and Turkish lira. Additionally, changes in the company’s business perimeter, particularly the sale of its wine division, resulted in a further negative impact of 54 million euros.

By region, Pernod Ricard’s revenues in Europe fell by 7.8% to 752 million euros. In the Americas, sales also dropped by 7.8%, reaching 641 million euros. The Asia and Rest of World segment saw a sharper decline of 16.1%, with revenues totaling 991 million euros. The company explained that sales in the United States were affected by inventory adjustments, while in China, sales plummeted due to weak macroeconomic conditions and low consumer confidence.

Looking at individual brands, Pernod Ricard’s international strategic brands saw sales fall by 9%. This was driven mainly by a significant drop for Martell in China and declines for Jameson and Absolut in the U.S., both particularly impacted by inventory adjustments. Ballantine’s experienced lower sales in South Korea’s travel retail sector, while Royal Salute faced challenges in Taiwan. Local strategic brands posted a 4% decrease in revenue, and specialty brands saw a 5% reduction, largely influenced by performance in the U.S. market.

Despite these declines, Pernod Ricard’s quarterly results slightly exceeded market expectations. The company’s reported revenue was above the consensus estimate of 2.35 billion euros noted by Invest Securities. Following the earnings announcement on October 16, Pernod Ricard shares closed up by more than 4% on the CAC 40 index.

Pernod Ricard continues to focus on premiumization and efficiency initiatives as it navigates challenging market conditions. The group has been restructuring its portfolio towards higher-end products and recently completed the sale of its wine division as part of this strategy. The company maintains strong positions globally: it is number one worldwide in white spirits, rums, and aniseed-based drinks; number two in whiskies and liqueurs; and number three in cognacs, brandies, and bitters.

The group’s business model is highly decentralized, with six brand companies—including Absolut, Chivas Brothers, Martell-Mumm-Perrier-Jouët, Irish Distillers, Pernod-Ricard France, and Havana Club—and five market companies supporting both international and local brands. The United States remains its largest single market at 19% of revenue, followed by India (12%), China (10%), and France (5%).

Pernod Ricard is also pursuing environmental goals under its “S&R roadmap,” aiming for carbon neutrality by 2050. By 2030, it targets net-zero emissions from its own operations and is working with over 5,000 farmers to promote regenerative agriculture across its supply chain.

The company faces several challenges ahead. Its business is highly seasonal—two-thirds of annual activity occurs between July and December—and it remains sensitive to currency fluctuations as well as tariffs imposed by major markets like the U.S. and China. Pernod Ricard is also seeking a buyer for its Mumm champagne brand as part of ongoing portfolio optimization.

For fiscal year 2026, Pernod Ricard said it expects an improvement in organic net sales trends during the second half of the year. Looking further ahead to fiscal years 2027 through 2029, management anticipates annual revenue growth between four and seven percent and continued progress on operating margins.

Alexandre Ricard serves as chairman and CEO of the group’s board of directors. The founding family retains a significant stake in the company at just over 14%, with additional holdings by employees and investment group Bruxelles-Lambert.

Despite current headwinds from global economic uncertainty and shifting consumer behavior—especially in key markets like China and the United States—Pernod Ricard remains committed to its long-term strategy focused on premiumization, digital acceleration, cost discipline, and sustainability initiatives across its global operations.