Pernod Ricard shows early recovery as sales return to growth
Pernod Ricard has reported a return to modest growth in its latest quarter, pointing to improving momentum after a challenging period for the spirits sector. The group says underlying trends are strengthening despite continued global uncertainty and regional headwinds.
Pernod Ricard said that the second half of its financial year to the end of June would show improving momentum, and so it has proved.
The French spirits group reported a stronger-than-expected 0.1% rise in sales for the third quarter, with total volumes showing 4% growth between Christmas and the end of March.
Nine-month performance still under pressure
That outcome means organic sales are marginally ahead for the nine months, but still 14.6% down in absolute terms. However, the latest quarter’s figures are the first to exclude comparisons after last year’s sales of the wines business and Imperial Blue in India.
The road to continued improvement, however, has been clouded by the hostilities in the Middle East, which will impact sales in the region as well as restricting travel retail, which accounts for about 6% of its revenues.
The group now expects its organic net sales to decline by between 3% and 4% in the current financial year.
Sales beat market expectations
Overall sales in the latest quarter were €1.95 billion, a like-for-like increase of 0.1%, compared with market expectations of a 0.7% fall.
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This improvement followed a 5% contraction in the second quarter as markets in India and global travel retail sales improved, offsetting continuing weakness in consumer demand in the United States and China.
In the quarter, organic sales in the USA were 12% lower, while those in China were 7% below the 2025 level. Those continued depressed levels were partially offset by organic sales in China rising by 11%.
Long-term growth ambitions remain
The company reaffirmed its guidance for 3% to 6% sales growth between 2027 and 2029, despite an industry-wide slump in alcohol demand and ongoing global uncertainty.
Pernod Ricard did not comment about the ongoing talks about a “merger of equals” with Brown-Forman, the owner of Jack Daniel’s, which analysts have calculated could save a newly combined group up to €450m a year in costs.
Those talks have been threatened by interest in Brown-Forman from US rival Sazerac.
The Wall Street Journal reports that Sazerac has offered $15 billion for its Kentucky-based rival. That is a premium of just above 10% to Brown-Forman’s present market value, which itself has been spurred by interest in the group.
Some commentators believe that the controlling Brown family would prefer a merger with Pernod Ricard because an exchange of shareholdings would ensure it retained some influence over the company they founded five generations ago.
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