Pernod Ricard FY26 profits slide on US and China weakness

27th Aug 2026 07:45

(Sharecast News) - Spirits giant Pernod Ricard reported a drop in full‑year sales and profits on Thursday as weakness in the US and China, currency headwinds and a softer pricing environment weighed on results.

Pernod Ricard posted a 3.9% organic decline in FY26 net sales to €9.4bn, with the Americas down 10% and China sliding 19% amid weak consumer sentiment and regulatory pressures. Europe fell 3%, while Asia-Rest of World was broadly flat. Reported sales were down 14.2%, hit by adverse FX and brand disposals.

Profits from recurring operations fell 5.2% organically to €2.42bn and 17.9% on a reported basis, with gross margin pressured by soft pricing, market mix, tariffs and cost inflation. Operating margins slipped 35 basis points organically to 25.8%, while group net profits from recurring operations dropped 19% to €1.48bn. Earnings per share declined 19% to €5.85.

However, despite the top‑line and profit declines, Pernod Ricard said it continued to defend margins through accelerated delivery of its €1bn operational efficiencies programme, achieving half the target in FY26 and now expecting full delivery by FY28. Structure costs fell 8%, helped by its Fit for Future reorganisation and tight cost control.

Free cash flow rose 6% to €1.2bn, with cash conversion improving 17 points to 91% thanks to disciplined investment and working‑capital management, while net debt edged down €65m to €10.66bn. However, Pernod's net‑debt‑to‑EBITDA ratio increased to 3.7x due to lower operating profits.

The French firm also proposed a €4.70 per‑share dividend, unchanged from FY25, with shareholders able to take the final €2.35 portion in cash or shares.

Looking ahead, Pernod Ricard said momentum has improved in the second half, with organic sales declining 1.3% versus 5.9% in H1, and highlighted continued growth across India, Africa, parts of Asia and travel retail. However, it also cautioned that the Middle East conflict had weighed on Q4 and was expected to continue affecting early FY27 trading.

As of 1015 BST, Pernod Ricard shares were untraded at €67.60 each.

Reporting by Iain Gilbert at Sharecast.com