Shares in French spirit group Pernod Ricard rose today (28 August) after the maker of Absolut vodka and Jameson whisky posted a smaller-than-expected fall in annual sales and profit for the year to the end of June.
Sales fell by 3% organically to €10.96bn, marginally better than the 3.2% dip expected by analysts and in line with revised guidance issued by the group in February.
Operating profit fell 0.8% to €2.95bn, in a much-improved showing on analyst forecasts of a 3.1% decline. Earnings per share, meanwhile, came in at €7.26, nearly 5% ahead of analyst forecasts. Pernod Ricard hailed the impact of “strong operating margin expansion”, supported by the conclusion of a three-year €900m efficiency programme.
The earnings beat sent shares in Pernod Ricard up as much as 8% in early trading, eventually falling back to close up 1.7% to €102.25 per share on Thursday.
Pernod Ricard had “maintained a very strong cost discipline” in spite of rising costs and tariff uncertainty around tariffs, CEO Alexandre Ricard said.
“We are steering through a challenging environment with agility, discipline, and more importantly, with strategic conviction,” he said.
In a further boost, the Malibu brand owner also cut its forecast for the expected impact of tariffs from €200m to €80m, with €35m now coming from the US (down from €60m) and €45m from China (down from €140m).
However, it maintained its view that FY2026 would be a year of “transition”, with improved sales skewed towards H2. A drop is expected in the first quarter after US wholesalers stockpiled ahead of US tariffs, with China continuing to see weak consumer demand.
The results were “a mixed picture with a welcome earnings beat but clearly a much weaker set-up into H126”, said JP Morgan analysts Celine Pannuti, Philip Spain and Tanya Tekriwal.
“While we would expect the shares to be supported by today’s beat, this may be tough to sustain post a c17% rally from June lows,” they wrote in a note to clients.
Jeffries analyst Ed Mundy and associate Sebastian Hickman were more upbeat. “A clearer picture of the investment case for Pernod Ricard is starting to emerge,” they wrote in a research note. “Earnings are troughing, we expect topline to recover going into H2, and we see a renewed emphasis on costs, cash and returns after some difficult years.”
It has been a turbulent period for Pernod Ricard, with shares remaining 7.3% lower in 2025 to date – despite today’s rally – and 21.7% lower than they were 12 months ago.
The Paris-headquarted company is aiming to save a further €1bn in costs over the next three years, with a second major restructure already underway.
The reorganisation is expected to result in a meaningful reduction in employee headcount.
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