Company Reports

Pernod Ricard’s fiscal 2026 results included a year-over-year organic net sales decline of 3.9%, a recurring operating profit decline of 5.2%, and free cash flow up 6%. Shares fell 5% intraday on Aug. 27.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

Pernod Ricard’s fiscal third-quarter trading update included an organic net sales decline of 0.1%, ahead of company-compiled consensus. The US and China markets declined 12% and 7%, respectively. Shares were down slightly in April 16 intraday trading.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

On March 26, Bloomberg reported that Pernod Ricard is in talks to acquire its US peer, Brown-Forman. At present, no details on pricing or terms have been provided, nor has either party provided any commentary. Pernod shares fell around 6%.

Pernod Ricard’s fiscal 2026 first-half results included a year-over-year organic net sales decline of 6% and a recurring operating profit decline of 8%. The shares were up 3% on Feb. 19.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

Pernod Ricard reported its first-quarter fiscal 2026 trading update, with an organic net sales decline of 8%, below company-complied consensus. Still, shares were up 2% at the market open on Oct. 16.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint.

Pernod Ricard reported its full-year fiscal 2025 results, with an organic net sales decline of 3% and operating margin expansion of 64 basis points, ahead of company-compiled consensus. Shares rose nearly 8% intraday.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint, in our view.

We maintain our EUR 121 fair value estimate for Pernod Ricard after the firm reported its third-quarter fiscal 2024 trading update, slightly below our estimates. Sales were soft in the quarter due to ongoing weakness in China and Europe, as well as temporary setbacks in India. Management maintained their fiscal 2025 guidance, including a low-single-digit decline in organic net sales and maintained operating margin. This outlook, which is akin to our forecasts, incorporates potential hits from tariffs. Similar to LVMH and Remy Cointreau, Pernod Ricard is exposed to United States import tariffs and Chinese import tariffs on cognac. Distillers often get caught in the crossfire of trade wars and leading firms have a proven history of successfully mitigating tariff hikes. Therefore, we don't expect a material long-term impact. However, our largest uncertainty lies in the timing of a recovery in the spirits industry. Shares were flat following the release and we continue to view the stock as undervalued.

Shares of Diageo, Pernod Ricard, Rémy Cointreau, and Davide Campari-Milano fell on March 13 after US President Donald Trump threatened to impose a 200% tariff on several alcohol products from the European Union. This followed the EU’s retaliation against Trump’s 25% steel and aluminum tariffs in which the EU plans to impose a tariff on US whiskey, along with other industrial and farm products. On March 6, Trump postponed a majority of the 25% tariffs on imports from Mexico and Canada for a month. The situation is dynamic, with uncertainty about the magnitude of the hit to the spirits being exported to the US.

Pernod Ricard reported first-half fiscal 2025 results that were below our top-line estimates but above our profitability expectations. Weak consumer confidence in key markets as well as tariff-related tension makes the timing of a recovery in the spirits sector uncertain. With this, management provided an update to guidance that is below our near-term expectations but largely in line with our long-term estimates. After adjusting our forecasts for a slower-than-expected recovery, we lower our fair value estimate to EUR 121 per share from EUR 129 and continue to view shares as undervalued. We hold our view that Pernod Ricard is well positioned to capitalize on long-term secular drivers when the environments in the US and China turn.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint, in our view.

We are transferring coverage of Diageo and Pernod Ricard. For Diageo, we lower our fair value estimate to GBX 2,590/$132 from GBX 3,100/$157. For Pernod Ricard, we lower our fair value estimate to EUR 129 from EUR 185. At current prices, both firms appear modestly undervalued. We see low investor confidence in the spirits industry, given the post-covid demand reset. However, we believe the sector will recover and both firms can reach their medium-term targets. We maintain our wide moat, standard capital allocation, and low uncertainty ratings for both firms.

Pernod Ricard, formed in 1975 through the merger of two French aniseed liqueur makers, has established itself as the world's number-two distiller through a series of acquisitions. The largest spirits players have expanded and scaled their portfolios over decades, holding up to 250 brands, and we believe there is more consolidation to come. Outside of the top five firms, the industry is highly fragmented, with local players often dominating in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Pernod, to expand their footprint, in our view.

Wide-moat Pernod Ricard reported its first-quarter trading update for fiscal 2025, which was below our expectations. While the numbers were light, management reiterated their medium-term outlook of 4%-7% organic net sales growth and organic operating margin expansion of roughly 55 basis points. We view the slowdown as cyclical rather than structural and expect a return to top-line growth within the next fiscal year. Our long-term forecasts remain unchanged and we maintain our EUR 185 fair value estimate. While current shares are trading below our intrinsic fair value estimate, we believe the cyclicality of the category means the stocks are unlikely to provide the defensive qualities investors seek in consumer staple equities.