Pernod Ricard reports sales decline in first half of fiscal year 2026

Pernod Ricard, the world's second-largest producer of wines and spirits, reported a 5.9% organic decline in net sales for the first half of fiscal year 2026, bringing the total to €5.25 billion. The reported sales saw a larger drop of 14.9%, impacted by negative foreign exchange movements and brand divestitures.

The company cited inventory adjustments in crucial markets, including the United States and China, as significant factors for the sales decrease. Sales in the US fell by 15%, while China experienced a 28% decline. Chairman and CEO Alexandre Ricard stated that the company's priorities are to strengthen brand desirability, enhance organizational efficiency, and improve cash generation.

"Our priorities are clear: to strengthen the desirability of our brands as a foundation of long-term, sustainable growth; to drive greater efficiency across the organization; and to enhance cash generation," Ricard said in a statement. He emphasized that Pernod Ricard's balanced geographical footprint and diversified portfolio are key to navigating a contrasted market environment.

For the first half of FY26, organic profit from recurring operations (PRO) decreased by 7.5%. However, the company achieved a notable 9.5% increase in free cash flow, driven by successful operational efficiency programs and a normalization of strategic investments. Pernod Ricard is continuing its €1 billion operational efficiencies program aimed at delivering benefits through fiscal year 2029.

The company anticipates an improvement in its business trajectory during the second half of the fiscal year. The second quarter showed signs of recovery, particularly in Global Travel Retail and India. Despite market challenges, Pernod Ricard remains confident in the attractive fundamentals of the spirits industry and the resilience of its business model.