By Joshua Kirby
Pernod Ricard said it is focused on cost-control after weakening sales in the U.S. and Chinese markets bit into the distiller's earnings.
The French maker of Absolut vodka, Jameson Irish whiskey and Martell cognac booked a 19% drop in its operating profit in the six months through December, the first half of its fiscal year, it said in an earnings update Thursday.
Sliding sales in the key U.S. and China markets weighed on the group's overall top line, offsetting encouraging signs in smaller but growing markets like India and Turkey. Total revenue for the first half was 15% lower on year at 5.25 billion euros ($6.19 billion), a drop that included a big hit from currency effects. A weaker dollar weighed, and the Indian rupee and Turkish lira also hit Pernod's top line.
American drinkers spent 15% less over the first half, Pernod said, pointing to a gloomy market for spirits in the U.S. Growing health consciousness and tighter purse strings have kept Americans away from bars and liquor stores, a trend also highlighted in recent earnings updates from brewers like Bud Light producer AB InBev and Dutch group Heineken.
In China, meanwhile, Pernod's sales dropped by an even sharper 28%. A tougher regulatory environment restrained sales of high-end spirits at bars and restaurants, while general consumer weakness also hit revenue, Pernod said. Still, some brands, including Absolut and Jameson, booked good growth in China over the period, the company said.
In light of the falling sales, Pernod is focused on boosting cash generation and cutting costs through efficiency measures, Chief Executive Officer Alexandre Ricard said.
"I remain confident in the attractive fundamentals of our industry, Pernod Ricard's strategy and the resilience of our operating model to deliver sustainable value over time," Ricard said.
For the remainder of the fiscal year, Pernod said it expects improving trends in sales, but noted that fiscal 2026 is a "transition year."
"We will defend our organic operating margin to the fullest extent possible, supported by strict cost control," the company said. The group has previously set out a mid-term plan to save 1 billion euros through operational efficiencies, a third of which will be made this fiscal year, it said.
For the medium term, Pernod is targeting 3%-6% organic sales growth and a wider operating margin.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
02-19-26 0224ET
