Pernod Ricard is now expecting its annual net sales to fall on an organic basis.

The Jameson and Martell owner, which had forecast its full-year organic net sales would return to growth, changed its outlook today (6 February) alongside the earlier-than-expected publication of its half-year results.

Pernod Ricard now sees its organic net sales declining at a “low-single-digit” rate during its 2024/25 financial year, which runs to the end of June.

The company pointed to an “ongoing challenging macroeconomic environment” and “intense geopolitical uncertainties” that it said are hitting the spirits sector.

The group retained its forecast of “sustaining” its organic operating margin.

Pernod Ricard gave some outline thoughts on how it sees subsequent financial years, describing 2025/26 as “a transition year”. The Absolut vodka owner expects “improving trends” in net sales but says its results are “conditional on the challenges posed by the global tariff environment”.

From the 2026/27 to 2028/29 financial years, Pernod Ricard is projecting “stronger” organic net sales growth. It is aiming for growth on average of 3-6% “accompanied with organic operating margin expansion”.

“It is helpful for Pernod to attempt to quantify the next few years, however many questions remain, particularly around tariff expectations,” analysts at Barclays wrote in a note to clients. “It is hard for us to see the company hitting the FY26 expectations if China Cognac tariffs are not removed or reduced later this year, and there could be a further impact if the US implements tariffs.”

Pernod Ricard had been due to issue its half-year numbers next week. Its board met yesterday and approved the release of the “preliminary” data. The accounts will be approved next week, it said.

The figures released today showed first-half net sales at €6.18bn ($6.41bn), down 6% on a reported basis and 4% lower on an organic basis.

In the first quarter of the year, Pernod Ricard had seen reported sales drop 8.5% and organic sales decrease 5.9%.

The company said the “sequential improvement” came amid “good performances in some mature and emerging markets”. They had partially offset “the declining but improving US and a continuing very weak China”.

During the first half, Pernod Ricard said its volumes were “in growth, with price/mix down 6% largely due to market mix”.

The group reports a profitability metric of “profit from recurring operations”, or PRO. First-half PRO fell 7% on a reported basis to €1.99bn, or down 2% organically.

Group share of net profit was €1.19bn, down 24%.

Bernstein analyst Trevor Stirling said the cut to Pernod Ricard’s sales guidance was “unsurprising”.

He added: “At a brand level, Martell was the black sheep, once again. The brand contributed 90% of the sales decline at a group level, due the weakness in China and travel retail. Indications for the other brands are more encouraging.

“We think sentiment will be hit again by the guidance cut and the indication of weakness in China. The positives are the directionally positive indication on trends in the USA and Jameson and the very impressive cost control. But these days, investors focus on growth more than margins.”

Shares in Pernod Ricard were up 2.35% at €104.70 at 12:01 CET.