Coming on the heels of Diageo's FY26 results where Scotch net sales were up 5%, Pernod's performance was underwhelming. The US and China were once again the main issues, but the French group's faith in India, the world's biggest whisky market, is undimmed. Ian Fraser reports … 

Scotch whisky makes up roughly a quarter (23%) of Pernod Ricard's global sales, but barely got a look in at the Paris-based drinks giant's annual results for the year to 31 June (FY26) on Thursday 27 August. Indeed "Scotch" was only mentioned twice during the 90-minute presentation and Q&A with chairman and CEO Alexandre Ricard and his new deputy CFO Mauve Croizat, with the word "whisky" going unmentioned. 

In terms of brands, Scotch was also verbally under-represented, with Ballantine's mentioned just four times, Chivas Regal three times, and Glenlivet and Aberlour once each. By comparison, Absolut vodka clocked up twelve, and Jameson's Irish whiskey nine.

Even so, whisky is performing better than the Group's 3.9% fall in its overall organic net sales. Pernod's Scotch whisky arm, Chivas Brothers was down 2% – a lesser decline than in the previous financial year, and one which saw a return to growth in the second half. Pernod dubbed Chivas' FY26 performance "resilient", with sales of Ballantine's up 1% (to 9.4 million cases), Chivas Regal flat (at 4.7m cases), The Glenlivet down 5% (to 1.3m) and Royal Salute down 9% (to 200,000).

Chivas Brothers – whose other Scotch brands include Aberlour, Long John, Passport, 100 Pipers, Scapa, and Something Special – also put in impressive performances in certain emerging regions. Sales were up 24% in Africa & the Middle East, rose 6% in India and jumped 26% in Turkey, though no figures were given for the US or China.

The 'big picture' of sales performance since 2010 put the last three years of pain in the shade: Ballantine's sales have risen 59% to 9.4m cases since 2010; Glenlivet is up by 116% to 1.3m today; and Royal Salute by 200% to 200,000 cases The laggard is Chivas Regal, which sold 4.2m cases in 2010 and 4.7m cases in FY26 – so a rise of just 12%.

That said, Pernod's Irish megabrand Jameson's has almost trebled to 11.4m cases over the period. If Chivas R had grown as much, it would be one of the French group's biggest brands.

Nodjame Fouad, CEO of Pernod's Aged Spirits & Champagne division — an enlarged internal group, which includes Chivas Brothers, Irish Distillers, Martell Mumm Perrier Jouët and North American Distillers — who replaced Chivas Brothers CEO Jean-Etienne Gourgues in January, said Chivas Brothers' performance demonstrates "resilience in a challenging global trading environment".

"Our brands continue to resonate with a global audience," she said. "The past year has been shaped by higher standards, bolder ideas and partnerships that stretch what's possible." She pointed to the success of Chivas Regal partnering with the Monégasque F1 driver Charles Leclerc to promote the 16YO limited edition. There was no mention of Chivas Crystal Gold. 

Fouad argued that the breadth of Chivas's Scotch portfolio "enabled [it] to respond with agility to evolving market conditions – leveraging quality brands, innovative products and smaller pack formats to answer the preferences of today's whisky drinkers." 

Speaking from Pernod Ricard's glitzy new Paris-Saint-Lazare HQ, Alex Ricard, 54, insisted a "buoyant" India is going to be a major growth driver for the company. "All the lights are green from a business point of view in India," he said. In FY26, Ballantine's, Chivas Regal and Jameson all outperformed in the country.

However, he declined to reveal how Pernod intends to leverage the UK-India FTA to boost sales, saying only: "You shouldn't be surprised if we were to introduce new propositions coming from the UK into India around Scotch. You shouldn't be surprised to see acceleration around innovation." 

Perhaps the biggest out-take from the results, however, is that Pernod continues to struggle in the critical markets of the US and China, and is facing strong headwinds elsewhere, including from supply-chain disruptions caused by the US-Israeli war on Iran and the shakedown from US president Donald Trump's tariffs. 

In the US – still the company's biggest market – group sales fell by 14% due to weaker consumer demand and over-stocking, while Chinese sales tumbled by 19% after Beijing restricted duty-free sales of Cognac in retaliation for EU tariffs on Chinese EVs. China's weaker economy, rise in chauvinistic consumer sentiment, and curbs on corporate hospitality were also blamed. While Ricard warned that US sales are unlikely to recover until 2029, he was more hopeful of a quicker turnaround in China.  

Ricard said the group has done "a lot of work on small and fun-sized formats, on affordable premiumization, RTD portfolio extension [as well as] leveraging our digital capabilities… The reality is small and fun formats really satisfy consumer desire for premium products despite economic constraints." The group also recently rejigged US distribution, moving several states away from the giant wholesaler RNDC which filed for bankruptcy in July.

However, overall, it seems the group is running to stand still. As well as the fall in organic net sales of almost 4%, profits from recurring operations fell 5.2% to €2.4bn, but 17.9% on a reported basis.

A warning that sales growth will be at the bottom end of the expected 3% to 6% range in 2027-29 was welcomed by the Quilter Cheviot analyst Chris Beckett, who said the revised guidance was "a more realistic guide, and broadly in line with what Diageo has been saying".

Given three years of falling sales and two of falling profits, it is perhaps unsurprising that Pernod, like its big rival Diageo, has fallen out of favour with investors. Since peaking at €214 on 21 April 2023, the shares have tumbled 70% to €64 – with the group's market capitalisation shrinking from €55.5bn to €16.2bn. 

The shares fell 6% on results day, and continued to slide the next day, even though Bernstein drinks analyst Trevor Stirling said the results had contained no "massive surprise" to justify the sell off. 

Alex Ricard was determined to put a positive spin on things, singling out pockets of strong growth and stressing the firm is ahead of schedule with a €1bn cost-cutting drive – which has cost 3,600 jobs since 2024. 

He also said "active portfolio management" is on the agenda – implying further disposals of non-core brands along the lines of last December's €412m sale of Imperial Blue, and the pursuit of M&A. The failure to cement a deal with Jack Daniel's owner Brown-Forman in April only seems to have fuelled the former Morgan Stanley investment banker's desire for future corporate nuptials.