Pernod's sales miss forecasts as tariffs weigh on spirits sector

By Emma Rumney

LONDON (Reuters) -Pernod Ricard reported a 3% decline in third-quarter sales on Thursday, missing forecasts as tariff uncertainty rocks the already-struggling spirits sector.

Analysts had expected Pernod, the world's No. 2 Western spirits maker, which produces Jameson Irish whiskey and Mumm champagne, to report a 2% decline in organic net sales in the three months to end-March.

Pernod's sales were boosted by U.S. wholesalers ordering ahead of expected tariffs. But this was offset by other issues including a production interruption in India, the impact of tariffs on cognac sales in China, and a 31% decline in its travel retail division due to the suspension of duty-free sales of cognac in China.

CEO Alexandre Ricard told Reuters that had it not been for a technical problem at its bottling plant in India and the late timing of Easter - neither of which will be factors in the next quarter - Pernod's results would have been in line with expectations.

Analysts, however, said issues like the timing of Easter were well flagged, and foreign exchange changes could impact Pernod's earnings.

Pernod now needs solid sales growth in the fourth quarter to meet analysts' average expectations for annual sales, Edward Mundy, analyst at Jefferies said.

Shares in Pernod fell 1.5% in early trade.

U.S. President Donald Trump's efforts to rewrite global trade relationships have meanwhile plunged the entire spirits sector into uncertainty.

The levies threaten consumer sentiment at a time when the appetite for pricey liquors is already under pressure amid high interest rates and inflation.

Ricard said Pernod had observed no change in underlying demand in the U.S., but it was unclear if that would change.

"It's difficult to predict in today's world," he said.

Pernod left its full-year guidance for a low single-digit decline in sales unchanged but warned the environment remains fluid.

It already cut its 2025 outlook as well as its growth forecast for 2027-2029. Pernod put the annual impact of tariffs at 200 million euros ($227.2 million) in February.

($1 = 0.8804 euros)

(Reporting by Emma Rumney; Editing by Gerry Doyle, Savio D'Souza, Jan Harvey and Joe Bavier)