Pernod Ricard warns Iran war hitting sales despite strong Jameson performance  

Spirit maker saw a significant hit to sales due to the Middle East conflict

The launch of Jameson Triple Triple in the US has been a success for Pernod Ricard. 

Pernod Ricard, the global spirits group which owns Jameson whiskey, warned on Thursday that full-year net sales will fall due to a decline in tourism in the Middle East amid the Iran war, even as it reported a slight pickup in third-quarter revenue.

The spirits group, which is in talks to merge with US rival Brown-Forman, is the latest company to report a significant hit to sales due to the Middle East conflict, after French luxury groups all pointed to weaker sales in the first three months of the year following a sharp slowdown in shopping in the region.

Pernod is the second-largest Western spirits group behind Guinness owner Diageo. Pernod said it expected group organic net sales to decline by 3% to 4% in the current fiscal year that started July 1. That would be a third consecutive annual decline in sales.

Its shares, which have lost over a third of their value over the past 12 months, fell almost 2% before recovering most of the losses.

Duty-free stores selling premium perfumes and spirits are also feeling the pain from closed airports and curbs on travel to the Middle East. Travel retail accounted for 6% of Pernod's net sales in 2025.

The group whose other brands include Martell cognac and Absolut vodka is also closely monitoring potential supply disruptions from the conflict, finance chief Helene de Tissot told analysts, but has not yet seen any impact on consumer confidence aside from caution over travel.

Pernod reported sales of €1.95bn in the three months to March 31, a like-for-like rise of 0.1%, and above expectations for a 0.7% decline in a company-compiled poll of analysts.

The performance was an improvement from a 5% contraction in the second quarter as markets in India and global travel retail sales improved, offsetting persistent weakness in consumer demand in the US and China, where sales fell 12% and 7%, respectively. In the US, Pernod said its launch of Jameson Triple Triple had helped "recruiting new consumers and maintaining brand desirability". 

The US did not fare as badly as some analysts had expected with consumption improving in bars and restaurants. "While the US market remains soft, we are convinced that the current challenges are primarily cyclical, linked to affordability issues," Ms de Tissot said.

The company also reaffirmed guidance of between 3% and 6% sales growth between 2027 and 2029 despite an industry-wide slump in alcohol demand.

Jameson continues to shine

In Canada, Jameson enjoyed double digit growth in Q3, while India also enjoyed double digit growth for Jameson. 

Spirits companies are battling a multi-year slump in sales that has prompted valuations to slide, CEOs to exit and companies to sell assets and cut costs. In the key US and Chinese markets, sales have dropped amid tariff threats, destocking and a sluggish Chinese economy.

If Pernod's talks with Brown-Forman result in a merger, it would save the combined company as much as €380m annually and help offset the decline in alcohol consumption, analysts say.

However, US spirits group Sazerac has also offered to buy Brown-Forman for about $15bn, a source familiar with the matter said on Wednesday, complicating the talks. Ms de Tissot said on Thursday that talks were ongoing, but the company would make no further comment on the matter.

"The underlying business is recovering, however, debate today will be around the potential Brown-Forman tie-up and capital discipline given competitive tension from Sazerac with a rival bid for $15bn," Jefferies analysts said in a note.

Reuters