Pernod Ricard warns on sales as Iran war hits travel

(Sharecast News) - Spirits giant Pernod Ricard warned on Thursday that the outbreak of war in the Middle East would weigh on sales, as tourism and spending took a hit. The French owner of Malibu, Martell, Jameson and Absolute, among others, posted like-for-like net sales of €1.9bn in the three months to March end, up 0.1% and above expectations for a 0.7% decline. It was also a notable improvement on the 5% slide recorded in the second quarter.

Fuelling the third-quarter improvement was solid trading away from mature markets, including an 11% spike in sales in India, which helped offset ongoing weakness in the US and China. Sales in the two countries slid 12% and 7% respectively.

Global travel retail sales were also robust, up 11%.

However, Pernod Richard acknowledged that the outbreak of war at the end of February would affect trading going forward.

It now expects global travel retail sales to be "in slight decline" for the year as a whole, due to travel disruption caused by the Iran war, and warned that group organic net sales were likely decline by between 3% and 4%.

The war in the Middle East is the latest blow to the drinks sector. Spirit companies worldwide have seen sales weaken in recent years on the back of various headwinds, including waning demand for alcohol, tariffs, destocking and sluggish consumer spending.

However, Pernod Richard, which is in takeover discussions with America's Brown-Forman, insisted: "In a context that remains volatile and uncertain, we continue to see the 2026 full year as a transition year, with improving trends in the second half.

"We continue to invest to increase our brands' desirability with sharp allocation, efficiency, innovation and experiences."

It concluded: "We are confident in our strategy, in our operating model and in the engagement of our teams to deliver sustainable value growth over time."

As at noon BST, the Paris-listed stock was trading down 1%.