Pernod Ricard Faces Profit Drop Amid Market Challenges

Pernod Ricard reports weak profit and sales for H1. The company now forecasts a decline in organic net sales for FY25, citing a challenging macroeconomic environment and geopolitical uncertainties.

Date: 06-02-2025

AI Rating: 4

Earnings Per Share (EPS): The company's earnings per share fell by 11 percent to 5.06 euros from 5.68 euros the previous year. This decline suggests a negative trend, potentially leading to investor concerns over future profitability.

Net Income: The group share of net profit decreased by 24 percent to 1.19 billion euros from 1.57 billion euros last year, indicating considerable pressure on profitability. Additionally, net profit from recurring operations dropped 11 percent, reflecting higher financial expenses.

Revenue Growth: Net sales fell by 6 percent to 6.18 billion euros, down from 6.59 billion euros previously, aligning with the company's outlook for a low single-digit decline in organic net sales for fiscal 2025. The expected transition year in FY26 with improving sales indicates a cautious approach towards future growth.

Profit Margins: The recurring operations profit also saw a decline of 7 percent from 2.14 billion euros the previous year to 1.99 billion euros. While the company expects to sustain organic operating margins, declining overall profits may raise concerns about their long-term sustainability.

Pernod Ricard's outlook includes a transition in FY26 and stronger growth projections from FY27 to FY29. However, the current report highlights significant risks from geopolitical issues and a weak market, particularly in China, which could impact stock performance adversely in the short term.

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