Pernod Ricard’s Q1 FY26 sales fell 7.6% organically to €2.38 billion, or 14.3% reported. The drop, broadly in line with expectations, follows FY25’s 3% decline amid weak China and U.S. demand. This aligns with a broader industry slowdown, testing Pernod Ricard’s strategic adaptability. Backed by strong brands and a €1 billion efficiency program, Pernod Ricard is steering through turbulent conditions.
Its key markets took the hardest hits. China’s sales plunged 27%, weighed down by a sluggish economy, inventory corrections, and a muted On Trade recovery, with Martell Cognac particularly affected during the quiet Mid-Autumn Festival. In the U.S., sales dropped 16% due to last year’s inventory buildup, though Jameson and Absolut outperformed a soft spirits market, aided by above-average marketing efforts.
A few bright spots emerged elsewhere. India rose 3%, led by Royal Stag and Jameson despite a 50% excise tax hike in Maharashtra. Canada delivered strong growth thanks to new RTD brands and Jameson, while Ballantine’s and Chivas boosted momentum in Turkey. Japan also posted solid gains. Global travel retail declined 15%, but the resumption of Cognac shipments to China Duty Free in Q2 points to recovery prospects ahead. Asia-RoW dipped 7%, while Europe eased 4%, reflecting mixed regional trends.
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Brand performance tells two stories. Core portfolios struggled — Strategic International Brands were down 9% and Strategic Local Brands off 4% — though Olmeca maintained solid momentum. By contrast, innovation and premiumization stood out: pre-mixed drinks (RTDs) jumped 10%, and high-end labels like Perrier-Jouët and Bumbu shone in Europe, underscoring evolving consumer preferences.
The festive quarter now looms large. Demand for Chinese New Year remains uncertain, the U.S. is ramping up seasonal marketing, and India continues to absorb excise headwinds. Pernod Ricard targets a stronger second half, with mid-term ambitions of 3–6% growth from FY27 to FY29, supported by tighter capital discipline and improved cash generation. CEO Alexandre Ricard reaffirmed confidence in the strategy, citing team resilience. With resilience in markets like Canada and Turkey, can the company turn holiday cheer into a genuine sales revival? The industry will be watching.
