Pernod Ricard closed its 2026 fiscal year with net sales of €9,404 million, an organic decline of 3.9% (down 14.2% on a reported basis, reflecting unfavorable currency effects and portfolio changes from brand disposals).
Excluding the United States and China — the group's two most challenged markets — organic sales actually grew 0.5%, underscoring how concentrated the pressure has been in those two regions. The results, published August 27, 2026, describe a year of "disciplined execution defending margin, delivering efficiencies and strengthening cash generation" amid what the group called a contrasted and uncertain trading environment.
A tale of two halves
The year showed a clear improving trajectory: organic sales fell 5.9% in the first half but narrowed that decline to just 1.3% in the second half. Management pointed to accelerating responses to changing consumer demand, particularly in the US, as a driver of the sequential improvement.
Regional performance: America drags, Asia flat, Europe softer
The Americas region fell 10% organically, driven primarily by a 14% decline in the US, where a broader spirits market slowdown, subdued consumer confidence, and inventory adjustments took a toll. Sell-out was down roughly 7% for the full year, though Jameson and Kahlúa outperformed their competitive sets, and Skrewball and Malibu improved on strong small-format sales and the Malibu Pink launch. Canada grew solidly on Jameson, Absolut, and RTDs, while Brazil recovered modestly in the second half from the prior methanol crisis; Mexico declined sharply amid difficult market conditions and share loss.
Asia-RoW was essentially flat, masking sharply divergent stories. India grew 7% (9% excluding the divested Imperial Blue brand), powered by strong demand for Royal Stag — now the world's top-selling whisky by volume at roughly 32 million cases — alongside Blenders Pride and double-digit growth in Jameson, Ballantine's, and Chivas Regal. China, by contrast, fell 19%, with prestige categories including Martell under significant pressure from weak consumer sentiment, regulatory measures, and Cognac share losses. Japan grew strongly on Perrier-Jouët, South Korea returned to growth, and Taiwan continued to soften. Africa and the Middle East grew strongly overall, led by Türkiye, Nigeria, and South Africa, though the Middle East region itself declined sharply due to regional conflict affecting fourth-quarter sales.
Europe declined 3%, with France, Spain, and Germany all softer, while the UK saw a modest decline despite growth in Jameson, Absolut, and Champagne. Eastern Europe continued to grow. Global Travel Retail fell 3%, though the period included the resolution of a Cognac suspension in China and a strong recovery in China Duty-Free sales around Chinese New Year.
Brand highlights
Strategic International Brands declined 4% overall but grew 1% excluding the US and China. Jameson saw a low-single-digit global decline but high-single-digit growth outside the US, with double-digit gains in India, Nigeria, and China. Martell fell sharply overall, though it grew excluding China. Absolut declined modestly worldwide but grew outside the US. The Scotch portfolio held up well, with Ballantine's up and Chivas Regal roughly stable. RTDs were a bright spot, up 12% globally, with strength in Canada, Australia, and Western Europe.
Profitability and cash
Profit from Recurring Operations totaled €2,423 million, down 5.2% organically and 17.9% on a reported basis. Gross margin was pressured by negative price/mix, tariffs, and cost inflation, partly offset by efficiency gains. Advertising and promotional spending held at 15% of net sales, the low end of the group's target range, while structure costs fell 8.0% as the "Fit for Future" reorganization took hold. Operating margin came in at 25.8%, down 35 basis points organically. Group share of net profit fell 26% to €1,203 million, with earnings per share down 19% to €5.85.
Free cash flow rose 6% to €1,197 million, with cash conversion improving sharply — up 17 percentage points to 91% — thanks to lower trade receivables and inventories and reduced capital expenditure. Net debt fell slightly to €10,662 million, though the net debt/EBITDA ratio rose to 3.7x due to the profit decline.
Dividend and outlook
The board proposed a dividend of €4.70 per share, stable versus FY25, with shareholders able to elect cash or shares for the €2.35 final portion. For FY27, Pernod Ricard expects organic net sales to be broadly stable, with continued declines in the US and China offset by ongoing strength in the rest of the world, particularly India. Looking further out, over FY27–29 the group is targeting organic sales growth toward the lower end of its 3%–6% medium-term range, alongside operating margin expansion, sustained cash conversion near 90%, and a net debt/EBITDA ratio below 3x by FY29.
Source: Pernod Ricard