Pernod Ricard warned that escalating conflict in the Middle East will cause full-year sales to decline, reversing earlier projections for growth. The French spirits maker, known for Absolut vodka, Martell cognac, and Jameson whiskey, now expects a 3%-4% drop in net sales for the fiscal year ending June 2026. This follows a 3% decline in the previous fiscal year.

The company cited the impact of U.S. and Israeli military actions against Iran on airport retail sales as a key factor. Travel retail, a significant revenue stream for premium spirits companies, has been particularly affected by reduced passenger traffic and changing travel patterns in the region. The conflict has disrupted operations at major Middle Eastern airports that serve as global transit hubs.

This guidance marks a significant shift from Pernod Ricard's earlier outlook, which had anticipated improving organic sales trends. The company's warning underscores how geopolitical tensions can directly impact global consumer goods companies, particularly those dependent on international travel and duty-free sales for growth.