Pernod Ricard SA (PDRDF) Half Year 2026 Earnings Call Highlights: Navigating Challenges with …

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Fri, February 20, 2026 at 12:01 AM GMT+9 4 min read

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**Net Sales:** Down 6% organically, with Q1 down 8% and Q2 down 5%.

**Profit from Recurring Operations (PRO):** Declined 7.5% organically.

**Free Cash Flow:** 482 million, up 10%.

**Structural Costs:** Reduced by 10% in the first half.

**Gross Margin:** Declined by 216 basis points.

**EPS:** Down 20% due to lower reported profit and negative FX impact.

**Net Debt:** 11.2 billion, decreased by approximately 0.9 billion over 12 months.

**Net Debt to EBITDA Ratio:** 3.8 times.

**Strategic Investments:** Expected to reach approximately 750 million in fiscal year '26.

**Cash Conversion Ratio:** Improved to 61%, with a target of 80% by fiscal year '26.

**Regional Sales Performance:** US down 15%, India up 4% (excluding Imperial Blue), China down 28%, Europe down 3%, Americas down 12%, Asia and rest of the world down 4%.

**Brand Performance:** Jamison mid-single-digit growth, Absolute outside the US up 2%, Martel excluding China up 20%, BJ up 25%, Bamboo up 16%.

Warning! GuruFocus has detected 3 Warning Sign with PDRDF.

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Release Date: February 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Pernod Ricard SA (PDRDF) has made rapid progress on its 1 billion operational efficiency program, showing strong cost discipline and a reduction in structural costs by 10% in the first half.

The company has a strong focus on cash generation, with free cash flow improving by approximately 10% to 482 million, despite a decline in profit from recurring operations.

Pernod Ricard SA (PDRDF) has a diversified and balanced global footprint, with stable sales outside the US and China, and growth in markets such as Turkey (up 27%), Ireland (up 3%), and Japan (up 6%).

The company is leveraging data and artificial intelligence to meet evolving consumer trends, focusing on convenience, affordability, and premiumization, with successful innovations like Absolute Tabasco.

Pernod Ricard SA (PDRDF) is actively managing its portfolio, with strategic disposals like Imperial Blue in India, contributing to a cumulative 1.5 billion in proceeds, and focusing on premium brands with growth potential.

Negative Points

Net sales are down approximately 6% organically, with significant declines in key markets like the US (down 15%) and China (down 28%), impacted by inventory adjustments and macroeconomic headwinds.

The profit from recurring operations declined by 7.5% organically and 18.7% on a reported basis, largely due to foreign exchange impacts and trade tariffs.

The company faces challenges from COGS inflation, particularly on aged liquids, which have only been partially mitigated by operational efficiencies.

Pernod Ricard SA (PDRDF) is experiencing a soft consumer confidence environment, particularly in China, with a cautious trade sentiment ahead of Chinese New Year.

The company's net debt to EBITDA ratio stands at 3.8 times, with a focus on deleveraging to bring it below 3 times by fiscal year 2029, indicating a need for continued financial discipline.

 






Story Continues  

Q & A Highlights

Q: What’s embedded in the guidance for H2 organic sales? Should we expect the rate of decline to moderate or even return to growth? A: Helene de Tissot, Executive Vice President - Finance and IT, stated that they expect a stronger H2 with improving trends for the top-line versus last year. This is supported by factors such as a different trajectory expected in China due to technicalities and a strong H2 for India, among other markets.

Q: Are you seeing any signs of improvement in the US market, and what is the distributor inventory situation? A: Alexandre Ricard, CEO, noted that while OND was softer than expected, there are signs of green shoots in January and February. The market is trending between 3 and 4%, and they are closing the gap with expectations of innovation driving growth. Inventory adjustments are planned and expected to impact the full year.

Q: Can you comment on the potential India IPO and its impact on your strategic plans? A: Helene de Tissot mentioned that while they are considering strategic options that could create value, the intention to deleverage and bring the net debt to EBITDA ratio below 3 by 2029 does not include an assumption of listing in India.

Q: Are there any signs of improvement in China, and how do you view the FX headwind for the full year? A: Alexandre Ricard stated that the environment in China remains soft, with premium brands expected to be dynamic but high-end experiencing softness. Helene de Tissot added that FX is expected to be significantly unfavorable for the full year.

Q: Can you provide comfort that you have sufficient inventory to fulfill medium-term demand, and what are the learnings from the Absolut Tabasco global rollout? A: Alexandre Ricard assured that they are ready to grow the business and will continue fine-tuning strategic stocks. The Absolut Tabasco launch has been successful, and they plan to replicate key learnings for future global launches.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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