Pernod Ricard shares jump as FY25 beat offsets soft FY26 outlook

Investing.com -- Pernod Ricard SA (EPA:PERP) shares rose more than 7% on Thursday after the French spirits maker delivered better-than-expected full-year 2025 results, even as it guided to a subdued start for fiscal year 2026.

For the year ended June 2025, organic sales declined 3%, slightly ahead of consensus estimates for a 3.2% drop. Organic operating profit fell 0.8%, a significant beat compared with the expected 3% decline. 

Earnings per share from recurring operations came in at €7.26, about 3.9% above the €6.93 forecast. Full-year sales totaled €10.96 billion and operating profit was €2.95 billion.

Regional trends were mixed. In the fourth quarter, Asia and the rest of the world posted 1.6% organic sales growth, outperforming expectations by 182 basis points. 

Strong demand in India supported the result, though China remained pressured by soft consumer sentiment and an ongoing anti-dumping investigation, which has left distributors with excess inventory. 

Pernod Ricard warned this would trigger a revenue decline in the first quarter of fiscal 2026.

In the Americas, sales fell 5.2% in the quarter, underperforming consensus of a 4.4% decline. The company said it expects distributor inventory adjustments in the U.S. to weigh on performance through fiscal 2026.

“The share price is already discounting a muted pace of recovery in F26, as confidence in recovery increases, we expect the shares to re-rate,” said analysts at Jefferies in a note. 

Looking ahead, Pernod Ricard signaled a “soft” start to the new fiscal year, with organic sales expected to contract in the first quarter before improving in the second half. 

Management pledged to “defend its organic operating margin to the fullest extent possible,” a stance analysts suggest could imply margin pressure. 

“Guidance seems weak, pointing to 2H weighted improvement in organic sales growth (with 1Q down) and an ambiguous comment on operating margin which we incline to think points to a decline,” said analysts at RBC Capital Markets in a note. 

Consensus forecasts point to a modest 0.5% growth in organic sales for FY26, a recovery from the 3% decline in FY25.

Beyond the near term, Pernod Ricard reaffirmed its mid-term targets for fiscal years 2027 to 2029, expecting average annual organic sales growth of 3–6% alongside operating margin expansion. 

The group is also pursuing efficiency measures that are projected to deliver €1 billion in savings over FY26-29.