Pernod Ricard profit plunges 85% to 632.6 million pesos in third quarter
Key Facts
Pernod Ricard, the world’s largest tequila producer, reported an approximately 85% year-on-year drop in net profit to 632.6 million Mexican pesos for the July-to-September period, according to a Reuters report published on October 28. The result was below the 1.07 billion peso average forecast of analysts polled by LSEG. Revenue fell 15% to 9.25 billion pesos in the same quarter. The results combine a decline in sales with a steeper drop in net profit compared with the same period a year earlier. Pernod Ricard had indicated in its annual guidance that net sales value would decline by a low single-digit percentage in 2026, excluding the effect of exchange rates.
Reuters estimated net profit at about $35 million and revenue at about $511 million, using an exchange rate of 18.0808 pesos per dollar at the end of September. These conversions show the dollar equivalent of the figures reported in pesos, while the comparison in the report remains year-on-year and in Mexican currency. The third-quarter revenue decline followed a 13.9% drop in net sales in the second quarter, according to the company’s statement for that quarter. Pernod Ricard said the second-quarter decline was 5.8% excluding currency effects, attributing it to an unfavorable geographic mix. Sales volume also fell 6.7% to 6 million nine-liter cases, or 3.4% excluding the P:Post brand.
Second-quarter data showed diverging performance across markets: sales in the United States and Canada fell 20.5% to 5.343 billion pesos, while sales in Mexico rose 1.8% to 2.919 billion pesos, and 5% on an organic basis. In the same period, the EBITDA margin fell to 20.9% from 23.4% a year earlier, and the company said the margin would have been 23.1% after adjusting for currency effects. In its statement for that quarter, management said the reorganization of its U.S. distribution network was progressing as planned and paving the way for improved commercial execution and sustainable long-term growth. The move followed the company’s termination of its partnership with U.S. distributor RNDC in February. The chief financial officer said changes of this scale take time to settle and may cause temporary disruption, shipment volatility, inventory realignment and additional complexity.
The company had forecast spending of between $90 million and $110 million for 2026, compared with about $130 million set for 2025. In comments reported by Reuters, the chief financial officer said Pernod Ricard continues to outperform the market despite weakness in the spirits sector, and that its operations would benefit from lower agave costs, though less than they did in 2025. This comes as the company faces declines in its largest markets: sales in the United States and Canada fell 4% in 2025, while sales outside North America increased but did not offset the decline in those markets. In February, company officials forecast that U.S. sales growth would begin to return in 2027. The company’s shares fell as much as 5% in morning trading on February 27 after earlier results missed expectations, before stabilizing slightly; that decline was unrelated to the current third-quarter results.
According to Pernod Ricard’s investor relations page as viewed on October 28, the latest published quarterly results were for the quarter ended June 30, 2026. This places the third-quarter report at the forefront of updates investors are awaiting on the company’s performance following a period of distribution reorganization. In its second-quarter statement, management presented the reorganization as progress in line with plan, while the chief financial officer said the effects of distribution changes could include shipment volatility and inventory realignment. As for the U.S. market, officials forecast in February that sales growth would return starting in 2027. Those forecasts remain part of earlier guidance, while the third-quarter figures reflect the year-on-year declines in profit and revenue reported by Reuters on October 28.