Pernod Ricard’s organic net sales fell 0.9% in the first quarter of FY27, narrowing from a 7.6% decline in the same period a year earlier. Volumes returned to growth at 6%, while volumes for Strategic International Brands rose 2%. The improvement continues a trend already visible in FY26, when the organic decline eased from 5.9% in the first half to 1.3% in the second. Excluding the United States and China Mainland, sales in the rest of the world rose 4%. The numbers show a further narrowing of the decline and a return to volume growth. What remains open is whether the mix of markets now supporting that improvement can sustain it.
India was the clearest contributor. Organic sales there rose 19%, with growth across both imported spirits and local brands. Jameson, Absolut and Ballantine’s recorded strong double-digit increases, as did Royal Stag and Blenders Pride. The company noted continued premiumisation and the ongoing contribution of the Xclamat!on range. Management said underlying sales grew in the high single-digit range, with reported growth further benefiting from the favourable comparison base following last year’s Maharashtra excise changes and pipe-fill effects linked to preparations for a potential IPO. India is becoming a more important source of growth, but sales momentum alone does not establish that it can replace the contribution once provided by the United States and China Mainland. Subsequent quarters will show how much of the current pace persists after the one-time elements fade.
The United States and China Mainland continued to decline, yet the signals beneath the sales numbers differ. In the United States, sales fell 10%. The total spirits market was down around 2% in value and bottled spirits around 4%. Pernod Ricard’s sell-out gap to market narrowed to roughly 2 points. Jameson and Kahlúa outperformed their competitive sets, Skrewball showed a marked improvement, and Malibu rebounded. Recent innovations include Malibu Pink, a small-format Skrewball Peanut Butter & Jelly variant, and an extension of the Jameson range. Sales remained affected by inventory adjustments. Demand is still soft, but relative brand performance has improved. In China Mainland, sales fell 25% amid ongoing inventory adjustments. Underlying depletions returned to growth, a clear improvement from the sharp decline a year earlier. Martell’s off-trade depletions grew on the back of a Mid-Autumn Festival campaign, while the on-trade remained under pressure from regulatory measures. The rest of the portfolio held up more steadily, with stronger performances from The Glenlivet, Royal Salute, Jameson and Olmeca. Reported sales continue to reflect trade inventory adjustments, while the return to growth in depletions suggests an improvement in underlying demand relative to last year. Both markets are still working through adjustments, but the nature of those adjustments is not the same.
Brand performance across the group was uneven. Strategic International Brands declined 1%, with stronger momentum from Jameson, Ballantine’s, Malibu and Perrier-Jouët offset by declines on Absolut and Martell, both still affected by inventory adjustments in their key markets. Strategic Local Brands rose 6%, driven largely by Royal Stag and Blenders Pride. Specialty Brands fell 5%, mainly reflecting conditions in the United States, though Código and Monkey 47 performed better. Europe declined 6%, with softer results in several Western markets and continued pressure in the on-trade. Global Travel Retail fell 4%, still affected by the Middle East conflict in Asian markets but supported by stronger traveller numbers in Europe. The pattern is one of shifting weight within the portfolio and across regions rather than a uniform recovery.
Guidance remains cautious. The company expects organic net sales to be broadly stable for the full year, with continued declines in the United States and China Mainland partly offset by growth elsewhere, particularly in India. It also intends to defend organic operating margin through cost control and further progress on its efficiency programme. For the medium term, it continues to project organic sales growth close to the lower end of the 3% to 6% range through FY29. The outlook treats the current improvement as real but limited in scope.
Growth responsibility is shifting away from the United States and China Mainland toward India and other markets. Whether India can hold a high-single-digit pace once base effects and pipe-fill fade, whether China Mainland’s depletion improvement translates into more stable sales, and whether the relative gains in US sell-out persist after inventory adjustments ease, will determine if this redistribution can support sustained growth. The new sources of growth are visible. They have not yet been shown to be sufficient.
