French spirits manufacturer Pernod Ricard announced Thursday that revenue declined across all five of its key markets during the first six months of its fiscal year, with company earnings taking a hit from currency fluctuations and increased expenses alongside struggles in American and Chinese operations.
The company, which produces Absolut vodka and Martell cognac, saw results that matched analyst predictions and demonstrated second-quarter improvements thanks to stronger performance in markets like India and international duty-free sales. Management anticipates stronger results in the year’s second half.
Despite facing an industry-wide downturn in consumer demand, Pernod Ricard maintained its projection for sales increases between 3% and 6% from 2027 through 2029.
Chief Executive Alexandre Ricard stated the company can achieve this target range even if American and Chinese markets, where revenues have declined due to stretched consumer budgets, inventory reductions, and China’s sluggish economic conditions, expand by less than 3%.
“Beyond the U.S. and China, we have the rest of the world,” Ricard explained during a phone interview with Reuters.
Company stock prices rose 0.32% at 0931 GMT Thursday, though shares have dropped more than 22% over the past year.
The spirits industry is experiencing a prolonged sales decline that has caused company valuations to fall, executive departures, and corporate restructuring including asset sales and expense reductions.
Pernod Ricard has implemented a reorganization strategy aimed at achieving 1 billion euros ($1.18 billion) in cost reductions between 2026 and 2029, which resulted in workforce reductions during the first half.
Ricard denied reports suggesting the company plans to take its Indian operations public, contradicting Wednesday media speculation about a potential stock listing review.
The company is pursuing additional measures to safeguard earnings and boost sales, including reducing finished product inventory levels and introducing more affordable options such as smaller package sizes.
Pernod Ricard’s organic operating earnings decreased 7.5%, performing slightly better than forecasts, but the decline reached 18.7% on a reported basis when including factors like currency exchange impacts.
Chris Beckett, an analyst at Pernod investor Quilter Cheviot, noted that even this “strikingly negative” financial performance failed to trigger share price declines because investor expectations for the sector have become so pessimistic.
“It says quite a lot about where we are,” Beckett observed.
