French beverage giant Pernod Ricard delivered quarterly sales results that exceeded analyst predictions on Tuesday, but the company cautioned that ongoing conflict in Iran is creating headwinds for its annual performance through reduced tourism and weakened travel retail operations.
The spirits manufacturer, currently engaged in merger discussions with American competitor Brown-Forman, announced quarterly revenue of 1.95 billion euros ($2.30 billion) for the period ending March 31, representing a modest 0.1% increase on a like-for-like basis.
Industry analysts had anticipated a 0.7% drop in sales, making the actual results a positive surprise for the company behind popular brands including Absolut vodka and Martell cognac.
The quarterly performance marked a significant turnaround from the previous quarter’s 5% decline, driven by recovering markets in India and improved global travel retail sales. However, these gains were partially offset by continued sluggish consumer spending in key markets including the United States and China.
Looking ahead, Pernod Ricard, which ranks as the world’s second-largest Western spirits company after Diageo, projected that organic net sales would fall between 3% and 4% for fiscal year 2026.
Despite near-term challenges and an industry-wide downturn in alcohol consumption, the company maintained its longer-term growth projections, reaffirming expectations for sales increases of 3% to 6% annually from 2027 through 2029.
