Pernod Ricard, the French-listed drinks group that owns Jameson whiskey, has revised its outlook for the year downwards amid “extraordinary trade tensions” and said it will look to find €1 billion in savings and “simplify” the organisation over the coming years.
Having previously forecasted modest growth, the spirits stable, which owns a coterie of international brands like Martell brandy and Absolut vodka among others, said it is now a “low single-digit decline” in net sales this year.
In a half-year update for the current trading year, the Irish Distillers owner said sales declined 4 per cent to €6.17 billion in the six months to the end of December, largely due to ongoing challenges in China and the US.
Sales in the US slumped by 4 per cent over the period while Chinese sales plummeted 25 per cent in a “challenging macroeconomic environment”, the group said.
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However, Pernod said sales of Jameson premium brands saw “good growth” in China over the period and experienced “strong growth” in India.
Updating its outlook for the remainder of the 2025 financial year and beyond, the drinks giant said it expects the global environment to sour somewhat in the medium term.
“Ongoing challenging macroeconomic environment and intense geopolitical uncertainties continue to impact the spirits market,” it said, “particularly the worsening context in China and Travel Retail Asia, notably impacting Martell”.
Pernod said it now anticipates low-single-digit declines in net sales this year as it looks to sustain its operating margin, which narrowed by 20 basis points in the first half of the year.
Next year, it said, is expected to be a “transition year” for the group, “conditional on the challenges posed by the global tariff environment”, with “improving trends in organic net sales”.
Pernod said it will deliver €1 billion in efficiencies from next year as it looks to “simplify the organisational structures” of the group and “optimise operations”.
“Amid extraordinary trade tensions, we are focused on defending organic operating margin to the fullest extent possible,” it said.
The group said it does not expect strong net sales growth of between 3 per cent and 6 per cent until the 2027 to 2029 period.
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