Pernod Ricard: Sales Down 0.9% in First Quarter, Weighed Down by United States and China
Pernod Ricard reported on October 15, 2026 revenue of €2,234 million for the first quarter of its 2026/27 fiscal year, down 0.9% on an organic basis and 6.3% on a reported basis. The gap between the two measures is largely attributable to a scope effect of -€127 million, primarily linked to the disposal of Imperial Blue and Wines, with the currency effect remaining limited to -€3 million.
The quarter reads in two blocks. The United States (-10%) and China (-25%) weighed on the overall performance, with the group noting that these two markets were affected "as expected" by inventory adjustments. Outside these two countries, Rest of World revenue grew by 4%, and group volumes increased by 6%.
United States and China in Decline, Rest of World Up 4%
By region, the Americas declined by 9%. In the United States, the total spirits market fell by approximately 2% in value, and bottled spirits by approximately 4%, with a slight improvement in underlying trends during the summer. Pernod Ricard's gap relative to this market, measured on consumer sales, narrowed to approximately 2 percentage points, compared with a wider gap in the fourth quarter of 2025/26. In Mexico, the group reported a sharp decline linked to persistent weakness in demand.
The Asia-Rest of World zone grew by 9%, driven by India (+19%). In China (-25%), sales to distributors returned to growth as the Mid-Autumn Festival approached, after the sharp decline in the previous fiscal year; however, the café, hotel and restaurant channel remains under pressure due to regulatory tightening.
Europe declined by 6%, with a more pronounced decline in Germany and commercial negotiations ongoing in Poland. Global Travel Retail fell 4%, with the Middle East conflict continuing to weigh on Asian markets in this channel.
Indian Growth Supported in Part by One-Off Factors
Indian performance is based on sustained demand and premiumization, with double-digit growth in imported spirits (Jameson, Absolut, Ballantine's) and Seagram's Royal Stag and Blenders Pride whiskies. However, the group notes two favorable elements for the quarter: a comparison base incorporating changes in excise policy that came into effect last year in Maharashtra state, and inventory building in the distribution channel.
This second effect stems from preparatory work undertaken for a potential initial public offering of Pernod Ricard India on the Indian market. Any decision to proceed with this transaction remains subject to approval by the board of directors.
By brand, International Strategic Brands declined by 1%, with growth in Jameson, Ballantine's, Malibu and Perrier-Jouët offset by declines in Absolut and Martell. Local Strategic Brands grew by 6%, while Specialty Brands fell 5%, primarily due to the American market.
Organic Revenue Expected Stable Over Fiscal Year
For fiscal year 2026/27, Pernod Ricard indicated it anticipates organic revenue globally stable, with a decline in the United States and China and the continuation of positive momentum in the rest of the world, including India. The ratio of advertising and promotional expenses to revenue is to be maintained at approximately 16%, and the group aims to preserve organic operating margin through cost control and acceleration of its efficiency initiatives. It expects strategic investments of approximately €700 million and cash conversion of approximately 90%.
Over the period 2026/27 to 2028/29, the group targets average organic growth close to the low end of the +3% to +6% range, given weakness in the American market. It anticipates an increase in organic operating margin, supported by €1 billion in operating efficiencies between 2025/26 and 2027/28.
This publication comes after a period of share price decline, which had posted a five-year low of €58.72 on September 29, 2026, before rebounding above €65.52 on October 14. The group targets a net debt to EBITDA ratio below 3x by 2028/29.
