Pernod Ricard's Q1 Sales Plummet Amid China's Economic Woes

Pernod Ricard, the world's second-largest spirits group, reported a disappointing 5.9% fall in first-quarter sales, largely driven by weakness in China. The French company's fiscal first quarter, which ended in September, saw a like-for-like decline of 5.9%, worse than analysts' expectations of a 4.8% drop. Sales totaled €2.783 billion ($3.02 billion) for the quarter.


The sales decline can be attributed to several factors, including the challenging macroeconomic environment in China, persistent challenges in the United States, and the impact of temporary anti-dumping measures imposed by China on brandy imports from the European Union. The combination of these factors led to a 26% fall in sales in China for Pernod Ricard in the quarter.


Pernod Ricard's CEO, Alexandre Ricard, acknowledged the challenges faced by the company and expressed confidence in its ability to navigate these difficulties. He attributed the company's resilience to its global scale, agility, and extensive portfolio of brands. Despite the setback, Pernod Ricard still expects to return to sales growth in the 2024/25 fiscal year.

The company is implementing various measures to mitigate the impact of the challenging macroeconomic environment in China. These include maintaining price discipline to support brand equity, focusing on market share gains, and expecting a strong decline in the first quarter of 2025. Additionally, Pernod Ricard is exploring alternative markets and growth opportunities to offset the slowdown in China.

In conclusion, Pernod Ricard's Q1 sales decline highlights the challenges faced by the global spirits industry in the face of economic uncertainty and geopolitical tensions. The company's ability to adapt and innovate will be crucial in navigating these challenges and returning to growth in the coming fiscal year.