PARIS — Pernod Ricard on Thursday reported a smaller-than-expected 0.9-percent drop in sales for the first quarter (Q1) of its 2027 fiscal year, impacted by weak demand and destocking in China and the United States although demand in India was strong.
Pernod, the world’s second-largest spirits maker after Diageo, said underlying trends in China were improving, confirming its cautious optimism ahead of the Chinese Mid-Autumn festival.
Pernod also reiterated a forecast for broadly stable net sales in the current fiscal year started on July 1.
The maker of Martell cognac and Absolut Vodka, which held unsuccessful merger talks with Jack Daniel’s maker Brown-Forman earlier this year, reported first-quarter sales of 2.234 billion euros ($2.51 billion), an organic decline of 0.9 percent against estimates of a 1.7-percent decline in a company-compiled poll of analysts.
Sales fell 10 percent in the US and 25 percent in China but rose 19 in India in the first quarter.
In India, the group has said it was taking preparatory steps to a potential initial public offering (IPO). It reiterated the decision to proceed to an IPO remains subject to board approval.
Pernod also said it will strongly defend its organic operating margin supported by strict cost control.
Pernod also reiterated it expects sales growth at the lower end of its 3-percent to 6-percent target range through 2029, underscoring the prolonged downturn facing global spirits makers.
Spirits makers across the industry are grappling with a multiyear sales downturn that has eroded valuations, triggered management changes, and prompted asset sales and cost-cutting.
