Pernod Ricard posts declining full-year results, cites weak China demand
Global alcohol manufacturer Pernod Ricard reported a weak full-year performance, with net sales decreasing by 3.9 per cent to approximately £8.1bn.
The company saw its net profit from recurring operations decline by 19 per cent compared to last year to around £1.27bn.
The strong decline in performance was due to continued soft consumer demand in the US market and inventory adjustments in the region as well as falling sales in China.
Net sales in China declined by 19 per cent, driven by a difficult trading environment and ongoing negative consumer sentiment according to the business.
In the USA, Pernod Ricard saw its sales decrease by 14 per cent with a spending slowdown among consumers as well as a slowdown in the spirits market.
The brands Jameson, Absolut and its Champagne brands Maison Perrier-Jouët and Maison Mumm experienced slight growth in the UK, with an overall modest decline in the region.
Most of the improved results were skewed towards the second half, with organic sales growth improving from a 5.9 per cent decline in the first half to a 1.3 per cent decline in the second half.
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Pernod Ricard’s main international brands all reported declining sales across markets, leading to a 4 per cent decrease in the category.
Jameson and Absolut Vodka each experienced a low-single-digit decline in net sales globally. Martell also posted a sharp decrease internationally.
The company also stated that there are ongoing negative impacts from the conflict in the Middle East, which has led to supply chain disruptions.
Pernod Ricard forecasted declines in the US and China in the upcoming quarter, while net sales are expected to be broadly stable for the full year.
The alcohol manufacturer projected organic net sales growth in the range of between 3 per cent and 6 per cent during FY27.
This follows a challenging first half for the company, where it posted falling sales but remained committed to pushing towards a turnaround.
