Pernod Ricard's first-half sales decline 4%, driven by US and China

Pernod Ricard, the world's second-largest wine and spirits producer, announced a 4% organic sales decline for the first half of its fiscal year ending September 30, 2024. The company's reported net sales fell 6% to €6.176 billion, with organic operating profit (PRO) down 2% to €1.985 billion.

The downturn was significantly influenced by difficult market conditions in the United States, where sales dropped 7%, and China, which saw a 25% decrease due to a weak macroeconomic environment and reduced consumer demand. The Martell cognac brand experienced sharp declines in both regions.

Despite the sales decrease, the company managed to expand its organic operating margin by 65 basis points. This improvement was attributed to revenue growth management, marketing agility, operational efficiencies, and strict cost discipline, demonstrating resilience amidst cyclical headwinds.

Pernod Ricard stated its commitment to investing in long-term sustainable growth, noting that strategic investments in capital expenditure and inventories peaked in fiscal year 2024. Free cash flow improved to €440 million. The company anticipates more favorable foreign currency exchange impacts in the second half of the fiscal year, which should support full-year results.