Pernod Ricard, the parent company of Absolut Vodka and other alcohol brands, has reported a steep decline in sales for the first quarter of FY26.

The business saw its sales decrease by 14% to around £2.07bn compared to the same period in the year prior.

Net sales were affected by a negative financial impact from unfavourable foreign exchange, which added £124m in expenses in the period. The European region experienced a sales decrease of 4%, with a slight decline in the UK region.

Pernod Ricard’s poor performance was driven by a reduction in sales in China by 27% due to a challenging economic environment and a 12% drop in sales in America, which was impacted by inventory adjustments.

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Moving forward, the parent company of Jameson expects to make a financial recovery towards the rest of the year.

A statement from Pernod Ricard said: “For FY26, we continue to expect improving trends in Organic Net Sales, skewed toward H2. We continue to invest to increase our brands’ desirability with sharp allocation, efficiency, innovation and experiences, with A&P investment ratio expected to remain at 16%.

“We will defend our organic Operating Margin to the fullest extent possible, supported by strict cost control and the implementation of our FY26 to FY29 £0.87bn Operational Efficiencies program, including the adaptation of our “fit for future” organisation. Focus on cash generation to continue, with strategic investments below £781.2m and strong operating working capital management. Cash conversion expected to improve further vs FY25.”