Pernod Ricard has reported a larger than expected decline in sales in its fiscal third quarter.
Sales in the three months ended 31 March fell organically by 3% to €2.3bn. Analysts had predicted a 2% decline.
In the year to date, sales slid organically by 4%, meanwhile.
The Jameson and Absolut maker said performance was affected by “new customs clearance procedures” and a temporary halt to production in India, as well as the impact of a later Easter and weakness on cognac, driven by the suspension of duty-free sales in China.
Sales in Pernod Ricard’s global travel retail division fell sharply by 31% in Q3 and are down by 17% in the year to date. China sales declined by 5% and are down 22% YTD. Steep declines on Martell were offset by “very strong ongoing growth” on Absolut, Olmeca and Jameson, said Pernod Ricard. US sales were up by 2% (-5% YTD), driven by wholesalers buying ahead of tariff announcements.
In Europe, meanwhile, sales fell by 7% in the quarter and 3% YTD.
“Performance in the USA was stronger than expected (partly driven by a pre-tariff buy-in), but Europe and Asia [were] weaker (partly due to phasing in India),” Bernstein analysts noted.
Barclays analysts struck a more downbeat tone. “Despite a boost from wholesalers buying ahead of tariff announcements, a miss at Q3 will not help investor confidence,” they said. “We believe consensus is failing to take into account the tariff effects in both China and the USA, and see downward pressure to numbers.”
The overall showing was “resilient”, inisted Pernod Ricard, adding the trading environment globally remained “challenging and very fluid with regards to tariffs”.
“Our balanced and broad-based geographic breadth and our diversified portfolio remain key in mitigating some of the impacts caused by the challenging environment,” it said. “As previously indicated, we are continuously adapting our resources with agility, deploying our operational efficiencies and steering the organisation to fuel our future growth and optimising our cash generation.”
Full-year guidance remains unchanged from earlier in the year. Organic net sales are expected to decline by low-single digit percentage in 2025, down from previous forecasts of revenue growth of between 4% and 7%.
In February, Pernod Ricard announced a plan to cut €1bn in costs between 2026 and 2029 in response to falling sales.
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