Pernod Ricard reports 7.6% drop in Q1 organic sales amid weakness in US, China markets
The spirits maker faced sharp sales declines in the US and China, driven by inventory adjustments and economic headwinds.
FRANCE – Pernod Ricard’s first-quarter results revealed a slowdown in key markets, as weaker demand in the United States and China, coupled with inventory adjustments, dragged down sales.
The maker of Absolut Vodka reported a 7.6% decline in organic net sales and a 14.3% decrease on a reported basis to €2.38 billion (US$2.77 billion), falling short of analyst expectations.
In the Americas, sales fell 12% to €641 million, exceeding the 5% decline projected by Bernstein analysts. The company’s US market posted a 16% slump in sales, which Bernstein’s Trevor Stirling described as “a big miss.”
Pernod Ricard noted it was “encouraged” by ongoing improvement in sell-out trends but said the overall spirits market in the country remained (US$745.3M)
Speaking during an investor call, Chief Financial Officer Hélène de Tissot said it was “too early to be quite specific” about the outlook in the US. She emphasized that the company remained focused on sustaining its recent sell-out momentum, though inventory corrections would influence the market trajectory for the rest of the year.
In China, Pernod Ricard’s organic sales fell 27%, with total sales in Asia and the Rest of the World down 7% to €991 million (US$1.15B). The Altos Tequila maker cited a “challenging macroeconomic environment” and “soft” consumer demand during the summer and Mid-Autumn Festival periods, with on-trade sales being particularly affected.
The group said it remained “cautious on the demand environment” ahead of the upcoming Chinese New Year.
Pernod Ricard’s global travel retail segment also recorded a 15% organic decline, impacted by the suspension of duty-free sales in China following the ongoing Cognac anti-dumping investigation, as well as weak performance in other travel retail markets.
The company expects the segment to return to growth in the full year of 2026, with Chinese duty-free sales projected to resume in the second quarter.
De Tissot stated that the second half of the fiscal year is expected to perform more strongly, supported by the recovery of Martell Cognac sales in China’s duty-free market and improved trading conditions.
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