Pernod Ricard’s H1 FY25 profits reached €1,985m, an organic decline of 2%, a reported decline of 7%.

Pernod Ricard has released its HI125 fiscal results which showed organic sales decline of 4% (6% reported) and a 2% (7% reported) decline in organic profits, but said it was determined to navigate current cyclical headwinds with resilience and agility.

Sales for H1 FY25 totaled €6,176m, an organic decline of 4% and 6% reported, with unfavourable Foreign Exchange impact of €177m mainly linked to the Argentinian Peso, Turkish Lira and Nigerian Naira, partly offset by a positive perimeter impact of €29m.

Pernod Ricard did expand its profit margin to 65bps, despite a sales decline, amidst ongoing challenges in the US and China, and saw sequential improvement in Q2, with good performances in some mature and emerging markets partially offsetting the declining but improving US and a continuing very weak China.

The domestic struggles it faced were mirrored in global travel retail; Pernod Ricard recorded a 9% decline in organic net sales, which the business attributed to ‘weakness in China further deteriorated by technical suspension of duty free regime on Cognac due to anti-dumping measures starting early December, and ‘weakness in Korea impacted by political crisis and weak macro environment’.

Within the channel, Pernod did however benefit from strong passenger growth in European aviation, and in the Americas cruise sector.

Regional variation

Across its other primary markets, organic net sales declined 7% in the US and 25% in China, though the Indian market saw a 6% rise in organic net sales, propelled by the growth of Jameson, Ballantine’s, The Glenlivet, and Royal Salute.

The weak performance in China heavily affected sales of Martell and Royal Salute amidst a significant decline in gifting, and subdued spend over the Chinese New Year.

In fact, Pernod noted Martell contributed to approximately 90% of total group net sales decline, due to ongoing challenges in China and GTR.

Elsewhere in Asia, Pernod saw strong growth in Japan and Vietnam, slight growth in South Africa, but declining sales in Taiwan.

In North America, Pernod continued to see success in Canada, particularly through its RTD range, and saw consumer demand recovery in Brazil, though saw negligible change in Mexico other than a gain in 0ff-trade share.

In Europe, Pernod saw resilient sales (excluding Russia) with growth in Poland, France and Ireland, but a slight decline in Spain and a sharper descent in Germany, as it faced mounting pressure on consumer spend.

Medium-term update

Pernod’s medium-term update anticipated low single digit decline in organic net sales for FY25, and highlighted the necessity for a robust defence of its organic operating margin given the ongoing trade tensions in the Americas and China.

It added FY26 was expected to be a ‘transition year’ with improving trends in organic net sales.

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