Pernod Ricard Profits Drop 26% Amid US and China Slump

French spirits group Pernod Ricard reported a 26 percent drop in annual profits to 1.2 billion euros for the fiscal year ending June 30, with net sales falling 14.2 percent to 9.404 billion euros. The company attributed the decline to steep sales drops in the United States and China, which fell 14 percent and 19 percent respectively. The downturn in China was linked to a challenging macroeconomic environment and anti-dumping duties on European cognac following EU tariffs on Chinese electric cars.

In response to the losses, the company implemented a 1 billion euro restructuring program that includes cutting approximately 3,600 jobs. Shares fell roughly 6 percent following the report. While premium brands like Martell and Havana Club struggled, the group found growth in ready-to-drink products and the Indian market, where sales rose 9 percent. India has become the company's second-largest market, and the board is currently discussing a potential initial public offering for its Indian business.

CEO Alexandre Ricard lowered long-term organic net sales growth expectations through 2029 to the lower end of the 3 percent to 6 percent target range. He warned investors that the U.S. market is expected to remain soft and lack growth over that period. For the 2026-27 fiscal year, the company forecasts broadly stable organic net sales.