GTR sales plunge 31% in Pernod Q3
Pernod Ricard saw revenue decline by 3% in the third quarter of fiscal 2025 after Cognac sales were paused in China duty free.
The French firm’s third-quarter (Q3) sales – January to March 2025 – reached €2.27 billion (US$2.58bn).
Sales for the year to date (YTD), which covers July 2024 to March 2025, declined by 4% to €8.45bn (US$9.6bn). It followed an organic sales drop of 4% in the previous six months.
Regarding Q3, Pernod Ricard noted a ‘resilient’ performance in a challenging macroeconomic and geopolitical environment.
The company’s sales were affected by ‘phasing technicalities’ that it believes will reverse in the fourth quarter.
It also cited the impact of new customs clearance procedures in India and temporary production interruption in one major state in the country, which has now been resolved, alongside a ‘high comparison base’ in global travel retail (GTR), and the late timing of Easter.
By far the worst performance for the group was seen in duty free. The group’s GTR sales plunged by 31% in Q3 (down by 17% year-to-date). Pernod Ricard attributed this to the ‘suspension of the duty free regime on Cognac’ in China’s travel retail.
The blocking of Cognac sales in GTR is in relation to China’s investigation into brandy imports from the European Union, which began on 5 January 2024. It was due to last for one year but was extended in January by three months (until 5 April).
However, in GTR, Pernod Ricard noted continued growth in Europe, growth from cruises, and ‘good traveller numbers’ in the Americas.
Martell drags China sales down
Sales in China fell by 5% in Q3 and were down by 22% in the year to date, with a ‘sharp decline’ for Martell Cognac (which increased its price by mid-single digits in February).
The group noted an expected soft performance during Chinese New Year, alongside strong growth for Absolut, Olmeca Tequila and Jameson.
The Americas posted a 3% gain in Q3 (down by 2% YTD). The company noted that US Q3 sales rose by 2% but fell by 5% in the year to date.
Speaking about the States, the company said the US spirits market remains broadly stable, with net sales ‘ahead of sell-out’ as wholesalers shipped early before tariff announcements.
Pernod Ricard also highlighted ‘improving performances’ for Jameson Irish whiskey and Absolut in the US, led by the vodka brand’s ready-to-drink collaboration with Ocean Spray.
In Canada, the group noted ‘strong’ YTD growth, led by Bumbu rum, Absolut and Jameson. Brazil also saw ‘continued solid momentum’ in Q3, with growth for Absolut, and Scotch brands Ballantine’s and Chivas Regal.
Sales in Europe fell by 7% in Q3 (down 3% YTD), with a ‘soft performance’ in Spain and a decline in Germany. France saw solid YTD growth, led by Ballantine’s, while Poland was ‘broadly stable’.
The Asia and rest-of-the-world region was down by 6% in both Q3 and YTD.
Sales in India were up by 1% in Q3 (up 5% YTD) as new custom clearance procedures affected imported spirits.
The group noted ‘strong’ growth for Jameson and Seagram’s whiskies, and the good performance of Ballantine’s and Royal Salute whisky.
Japan showed ‘strong momentum’ in the year to date, while Korea experienced ‘continuing weakness’ due to political disruption.
Global and speciality brands in decline
Looking across its portfolio, Pernod Ricard reported a 4% decline for its ‘strategic international brands’ (down 6% YTD), due to decreases for Martell and Royal Salute. However, Jameson, Chivas Regal, Ballantine’s and Absolut showed ‘good growth’.
The firm’s local brands fell by 5% in Q3 and were flat in the year to date, led by ‘solid growth’ for Seagram’s whiskies, Olmeca and coffee liqueur Kahlúa.
The ‘speciality brands’ division saw sales drop by 8% in Q3 (down by 6% YTD), with double-digit gains for Bumbu, ‘good growth’ for peanut butter-flavoured whiskey Skrewball, and a ‘soft performance’ for Aberlour whisky.
Full-year outlook
In February, Pernod Ricard 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.
The company had 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.
In its latest update published today (17 April), the group confirmed its expectation of a low-single-digit decline in organic net sales, incorporating the impact of expected tariffs in China and the US.
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