Pernod Ricard Says Booze Sales Hit by Iran War — Update

By Joshua Kirby

French distiller Pernod Ricard said it is bracing for a decline in sales for the full fiscal year as the impact of the U.S. and Israel's war on Iran weighs on airport retail, adding to the tough backdrop for the booze business.

The Paris-based maker of Absolut vodka, Martell cognac and Jameson Irish whiskey had previously said it banked on improving organic trends in sales over fiscal 2026, which runs through June. But following escalation of conflict in the Persian Gulf and wider region in recent months, the company now expects to book a 3%-4% decline in net sales for the year. The company reported a 3% drop in its top line last fiscal year.

Continued travel disruption from the war, which has forced Gulf hub airports to close and locked airlines out of the region, is weighing on Pernod's travel-retail division, which includes duty-free sales at airports. The business booked sales growth of 11% over the quarter through March, boosted by Lunar New Year travelers buying cognac and a pickup in growth in sales on ocean cruises. But fallout from the Gulf conflict means revenue from the division will probably decline for the fiscal year as a whole, Pernod said.

The hit from the Iran war compounds existing challenges in many key markets for Pernod and its peers in the global booze industry. In the U.S., group sales were 12% lower on year over the most recent three-month period as health-conscious consumer continue to shy away from drinking. Pernod said it is attempting to lure Americans through eye-catching new products from its labels, including Absolut flavored with Tabasco hot sauce, a triple-distilled Jameson and a pink Malibu rum flavored with tropical fruits.

In China, meanwhile, a crackdown on official boozing among Communist party cadres has squeezed sales of the group's high-end Martell cognac and Scotch whiskies, and consumer confidence in general remains low in the important market, Pernod said.

"Underlying performance was soft, in line with the cautious sentiment of the trade ahead of Lunar New Year," the company said. Pernod's China revenue dropped 7% over the quarter, and for the year-to-date is nearly a quarter down from last fiscal year.

Pernod last month said it was in talks with Brown-Forman, the Kentucky-based maker of Jack Daniel's, over a merger. Analysts argue a tie-up could offer both groups a means of overcoming tough sales trends, though structuring it could be tricky.

India remains a bright spot for the group, with revenue booking a pickup to 11% growth over the quarter as demand for Pernod's local brands and imports alike continued to increase.

For the third quarter through March, Pernod made group sales of 1.945 billion euros ($2.30 billion), down 15% from the same period last year. On an organic basis, with the heavy hits from currency fluctuations removed, sales were 0.1% higher on year.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

April 16, 2026 02:13 ET (06:13 GMT)