Pernod revises FY outlook after sharp sales drop in China

French company Pernod Ricard has scaled back its full-year outlook due to a 25% sales drop in China during the first half of the group’s 2025 financial year, and uncertainty over tariffs.

Pernod Ricard, whose portfolio includes Absolut and Jameson Irish whiskey, is now expecting a low-single-digit decline in organic sales for its 2025 financial year, having previously forecast a return to growth.

The firm’s organic net sales for the first six months of its financial year (H1) fell by 4% (6% on a reported basis) to €6.176 billion.

Pernod Ricard cited sharp declines for Martell Cognac and Royal Salute Scotch whisky in China for the decline, alongside an ongoing challenging macro-economic environment and weak consumer demand.

Total sales of Martell Cognac fell by 25% during H1, contributing to around 90% of the total group net sales decline. Royal Salute fell by 20% overall.

In the company’s full-year 2025 outlook and medium-term update, Pernod Ricard noted: “Conditional on the challenges posed by the global tariff environment, FY26 is expected to be a transition year with improving trends in organic net sales.”

US president Donald Trump’s threat of tariffs on Mexico and Canada – which would impact categories such as Canadian whisky, Tequila and mezcal – have been forcing companies to prepare. Earlier this week, Diageo scrapped its full-year forecast due to the uncertainty over US tariffs, combined with weak demand in certain markets.

The company also forecast sales would grow by 3% to 6% between 2027 and 2029, down from previous guidance of 4% to 7%, as it warned ‘extraordinary trade tensions’ were impacting performance.

Regional and brand performances

Looking at regional performances, Pernod Ricard’s sales in the Americas fell by 4% in H1, with the US down by 7%. Canada was said to be in ‘good growth’ and Brazil was also up. Mexico, however, was in decline.

Asia and the rest-of-the-world region fell by 5% in total, including the 25% plummet in China.

India was buoyant, however, with a 6% increase. Jameson experienced very strong growth, and The Glenlivet, Ballantine’s, Royal Salute and Royal Stag brands also delivered good growth. This momentum is forecast to continue for the second half of the financial year.

Sales in Europe fell by 2% during H1 (but remove Russia from the equation, and sales were up by 1%). Poland, France and Ireland were noted for their growth.

Global travel retail, on the other hand, was challenging – impacted by weakness in China, and the suspension of duty free on Cognac due to the anti-dumping measures introduced in 2024. This is expected to ‘heavily impact’ the company during the second half of the year.

Brand-wise, Ballantine’s delivered organic net sales growth of 8%, while Chivas Regal was up by 3%. Havana Club was also up by 1%.

Jameson Irish whiskey and Beefeater gin were both flat at 0%, while the following brands all declined: Absolut (down by 2%), Ricard (down by 5%), Malibu (down by 4%) and The Glenlivet (down by 9%).

Pernod Ricard closed its medium-term outlook statement by noting: “We are confident in our strategy, in our operating model’s ability to deliver and in the engagement of our teams. We are determined to navigate with agility these cyclical headwinds.”