The decline is attributed to persistently weak demand in the company’s top markets, China and the US, as consumers pull back on spending on premium spirits. Pernod Ricard's China sales plummeted 26% during the quarter, worsened by low consumer confidence driven by the country's real estate crisis. CEO Alexandre Ricard expects a further drop in Chinese sales this year, surpassing last year’s 10% decline.
In addition, anti-dumping measures imposed by China on brandy imports from the European Union have also impacted sales. This action followed the EU’s decision to impose tariffs on Chinese electric vehicles. Meanwhile, US consumers remain cautious, curbing their purchases of high-end spirits after a boom in post-pandemic demand.
Despite the challenges, Pernod Ricard maintained its annual net sales growth forecast and expects sales volumes to recover by fiscal 2025. However, analysts like Trevor Stirling of Bernstein remain cautious about short-term optimism, noting that the company is currently in a “perfect storm” of economic pressures.
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