Pernod Ricard shares surged 8% after the French spirits maker predicted sales improvement in fiscal 2026, despite initial weak consumer demand and de-stocking in China and the U.S. Tariffs agreed in July posed less of a threat than anticipated, with results for 2025 surpassing expectations.

CEO Alexandre Ricard expects 2026 to be a “transition year” with sales picking up in the second half, following a 3% organic sales decline in the previous year. The company projects an 80 million euros ($93.66 million) annualized impact from U.S. and China tariffs, down from the previous estimate of 200 million euros.

Pernod Ricard shares rose 5.16% to 104.35 euros, bouncing back from a 9% loss this year. Analysts believe much of the negative news is already priced in. The company aims for 3-6% annual organic sales growth from 2027-2029, along with margin expansion, as part of their restructuring plan.

In the twelve months to June 30, sales reached 10.959 billion euros with a 3% organic decline. Operating profit was 2.951 billion euros, down 0.8% organically, outperforming analyst predictions. Sales in the U.S. dropped by 6% due to prolonged tariff uncertainty, prompting distributors to adjust inventory levels.

Sales in China for 2025 fell by 21% due to weak demand and an anti-dumping investigation, resulting in excess distributor inventories. The company anticipates a sharp drop in first-quarter 2026 sales in China. Pernod Ricard remains focused on cost-cutting and aims for sales recovery in the upcoming fiscal year.

Read more at Yahoo Finance: Pernod Ricard lifts hopes for recovery after hit from US, China