Pernod Ricard has reported a third consecutive year of declining sales as persistent weakness in the United States and China continues to weigh on the world's second-largest spirits group. Net sales for the financial year ended June 30, 2026 fell to EUR 9.404 billion, down 14.2% on a reported basis and 3.9% organically. The previous year's sales had amounted to EUR 10.959 billion. Profit from recurring operations dropped 17.9% to EUR 2.423 billion, or 5.2% organically, while group net profit fell 26% to EUR 1.203 billion. The sharp difference between reported and organic figures was largely caused by currency movements and portfolio changes.
The group's two largest problem markets remained the United States and China. US sales declined organically by 14%, reflecting weaker spirits demand, subdued consumer confidence and inventory adjustments. China fell by 19% amid weak consumer sentiment, macroeconomic pressure and regulatory measures, with prestige cognac particularly affected. Excluding the United States and China, Pernod Ricard's organic sales actually increased by 0.5%. Europe declined by 3%, with Germany and Spain among the weaker markets, while Mexico, Taiwan and the Middle East also struggled. Japan, Türkiye, Nigeria and South Africa recorded strong growth, while Canada, South Korea and Eastern Europe performed more positively.
India increasingly provides the counterweight. Sales there rose 7%, or 9% excluding the divested Imperial Blue business, making India Pernod Ricard's second-largest market by sales behind the United States and ahead of China. Local whiskies such as Royal Stag and Blenders Pride performed strongly, while Jameson achieved double-digit growth and is now the country's leading imported premium spirits brand. The recently implemented India-UK free trade agreement could provide further support to imported Scotch whisky and other international brands. At the same time, Pernod Ricard is actively examining a possible IPO of its Indian subsidiary and has begun preparatory legal work, although Alexandre Ricard stressed that no decision has yet been taken.
Performance also varied sharply between individual global brands. Champagne Perrier-Jouët increased sales by 20%, with volume reaching 4.8 million bottles, whereas Mumm declined 2% in both sales and volume while remaining larger at six million bottles. Havana Club suffered a 16% volume decline and a 20% organic sales drop, while Martell volumes fell 5% and organic sales by 12%, reflecting in particular the difficult Chinese cognac market. Ready-to-drink products were one of the group's strongest categories, growing 12%, notably in Canada, Australia and Western Europe.
Despite the difficult results, Pernod Ricard continues to invest selectively in categories with stronger structural growth. The group has taken full ownership of Italicus Rosolio di Bergamotto, acquiring the remaining 50% from founder Giuseppe Gallo after the partners had jointly owned the Italian aperitivo brand since 2020. Italicus, launched in 2016, has sold more than three million bottles and expanded to 47 countries. Gallo has stepped down as CEO and will concentrate on Savoia Vino Aperitivo and his Italspirits business. Pernod Ricard sees further potential in the aperitif category as spritz-style drinks and lighter, lower-alcohol drinking occasions continue to gain popularity.
Management is meanwhile accelerating its restructuring. Structural costs were reduced organically by 8% in FY26, while free cash flow increased 6% and cash conversion improved to 91%. Around half of the planned EUR 1 billion operational-efficiency program has already been delivered, with completion now targeted for FY28, one year earlier than originally planned. The current program follows the broader "Fit for Future" restructuring announced last year [inside.beer, 19.06.2025].
Pernod Ricard now expects organic sales to be broadly stable in FY27 and has tempered its medium-term ambitions. From FY27 through FY29, management expects average organic growth to be close to the lower end of its previously communicated 3% to 6% range, essentially around 3%, largely because it does not expect the US market to return to meaningful growth during that period. The defensive strategy follows another unsuccessful attempt to achieve scale earlier this year, when merger talks with Brown-Forman collapsed [inside.beer, 28.04.2026]. With mature spirits markets contracting, India expanding and aperitivo and RTD formats gaining ground, Pernod Ricard's portfolio is increasingly being reshaped around where the global beverage market is still growing.
