Pernod Ricard

Note: This is a daily stock update and the information stands true as of 27/08/26, 09:00 CET

Company Update:
FY26 results: organic net sales miss, recurring operating profit beat on lowered A&P.

Q4 sales down 2% organically, a clearly disappointing performance; FY26 net sales of EUR 9,404m, -3.9% organic, below consensus (-3.7%) and at the bottom of the guided range (-3% to -4%).
Profit from recurring operations of EUR 2,423m, -5.2% organic, above consensus (-5.9%) — but the beat comes from A&P at 15.0% of sales (low end of the c.16% guided, down 11% organically).
Free cash flow of EUR 1,197m (+6%), cash conversion at 91% (+17pts), well above target. Deleveraging continues (net debt/EBITDA at 3.7x).

FY27 guidance: organic net sales broadly stable (US and China still declining on inventory adjustments, continued growth in Rest of World); operating margin to be strongly defended through accelerated efficiencies and digital investment.

Mid-term FY27-29 guidance (partly revised down):
Net sales +3% to +6% p.a. now guided close to the lower end of the range, on US softness.
EUR 1bn efficiencies program accelerated to FY26-FY28 (from FY29), half delivered.

A miss on the top line and a beat on PRO, but the beat is mainly helped by lower A&P. The results are a bit disappointing. FCF conversion is improving and deleveraging continues, but FY27 guidance lacks precision and organic net sales growth is now guided at the lower end of the mid-term range. We expect a negative market reaction today.

Expert Opinion:
Q4 is a disappointment after two quarters of better sales performance. Is it a bump on the recovery road or does it invalidate the expected turnaround? In any case, issues in China and the US remain.  While valuation is attractive (PE27 at 11.6x with a 6.5% div Yield) we would rather wait for an actual improvement of momentum in the US or China before committing more, capital on the name.


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