On August 28, 2025, Pernod Ricard released its FY25 financial results, revealing a 3.0% organic decline in net sales to €10,959 million (down 5.5% reported), driven by challenges in China Mainland, the USA, and Asia’s global travel retail (GTR) sector. Despite the downturn, the company showcased resilience with a 64-basis-point organic operating margin expansion to 26.9%, a robust free cash flow of €1.13 billion (up 18%), and a proposed €4.70 per share dividend, steady versus FY24. This performance underscores Pernod Ricard’s strategic focus on brand desirability and long-term growth amid a tough market.
Regional Market Dynamics
The Americas saw a 3% organic sales dip, with the USA dropping 6% due to subdued consumer confidence and economic moderation. Yet, execution sharpened, narrowing the sell-out gap-to-market, and brands like Jameson, Absolut, and Kahlúa outperformed competitors, with Jameson turning positive in Q4. Canada thrived with growth in Jameson, Bumbu, The Glenlivet, and RTDs, while Brazil gained share led by Beefeater, Royal Salute, Chivas Regal, and Absolut. Mexico posted a low single-digit decline but held whisky market share.
Asia-RoW fell 4%, but India bucked the trend with a 6% rise, fueled by strong consumer demand and premiumization. Excluding Imperial Blue, growth hit 8%, with Royal Stag and Strategic International Brands, including Jameson—the #1 imported spirit in India—posting double-digit gains. However, Maharashtra’s excise policy changes loom as a FY26 Q1 headwind. China Mainland struggled with a 21% drop, hit by weak sentiment and an anti-dumping investigation, though premium brands like Jameson and Absolut grew. Japan achieved mid-single-digit growth, while Turkey and South Africa shone with Chivas Regal and Ballantine’s leading. South Korea and Taiwan lagged amid macro pressures.
Europe held steady at -2% (flat ex-Russia), with Eastern Europe dynamic and France growing, though Germany and Spain dipped. Market share gains in France and Germany, plus solid performances from Bumbu, Jameson, and Chivas, bolstered results. GTR plummeted 13% due to the Cognac suspension in China Mainland Duty Free since December 2024, with Asia’s South Korea and Taiwan weakening. Recovery signs emerge, with Q2 expected to benefit from resumed Martell sales, targeting growth in FY26.
Brand Performance Highlights
Strategic International Brands dipped 4%, with Jameson showing low single-digit global growth, stabilizing in the USA but softening in Western Europe. Martell slid in China Mainland but grew in South Africa, while Absolut advanced across most regions, barring a German decline. The Scotch portfolio eased due to weakness in the USA, Germany, South Korea, and Taiwan, offset by broader gains.
Subscribe to our newsletter
Strategic Local Brands rose 2%, driven by Seagram’s whiskies, notably Royal Stag, and strong Kahlúa growth in the USA, alongside Olmeca’s success in Africa, Eastern Europe, and China Mainland. Specialty Brands fell 7%, with Bumbu surging in Europe and Canada, and The Deacon and Château Sainte Marguerite gaining in Japan and Western markets. Aberlour and Lillet declined due to USA and German softness. RTDs bucked the trend with a 7% uptick, signaling innovation strength.
A key move was the disposal of the Imperial Blue business, expected to boost margins and growth, alongside wine portfolio adjustments, sharpening focus on premium spirits.
Financial Snapshot and Future Outlook
Financially, FY25 delivered a profit from recurring operations of €2,951 million (down 0.8% organic, 5.3% reported), supported by a €900 million efficiency program and cost discipline. Free cash flow jumped to €1.13 billion, aided by improved operating working capital, while net debt fell €224 million to €10,727 million, with a net debt/EBITDA ratio of 3.3x. FY26 looms as a transition year, with Q1 declines expected from US inventory adjustments, soft China Mainland demand, and Indian excise impacts, but H2 should improve. The company targets organic sales recovery, maintaining a 16% A&P ratio and €900 million in strategic investments.
Mid-term (FY27-29), Pernod Ricard aims for 3-6% annual organic sales growth and margin expansion, backed by a €1 billion efficiency plan. This strategic pivot highlights its commitment to premiumization and cash generation, setting the stage for a resilient future in the spirits industry.
Strategic Implications for the Industry
Pernod Ricard’s FY25 results reflect a market adapting to global shifts. The India surge and RTD growth signal rising demand for premium and innovative offerings, while China Mainland’s challenges underscore the need for agility. GTR’s recovery hinges on policy resolutions, offering a lens into broader industry trends. As Pernod Ricard refines its portfolio, its moves could inspire peers navigating similar headwinds. As Pernod Ricard charts its path forward, CEO Alexandre Ricard underscored the company’s vision, stating, “FY26 will be a year of transition, laying the foundations for sustainable growth in the years ahead,” reflecting confidence in its long-term strategy.
