Pernod Ricard reported sales down 7.6% on an organic basis to €2.38 billion ($2.77b) for its fiscal first quarter ended in September, attributed to inventory adjustments in the U.S., unfavorable foreign exchange impact, and the company’s divestiture of its table wine unit. Despite the Q1 declines, the company sees a brighter future, expecting organic sales to improve in the second half of fiscal year 26, adding that key brands in the U.S. like Jameson, Absolut, and Kahlúa are outperforming their competitive set.

U.S. sales dropped 16% for the quarter, with Pernod noting that it’s seeing “resilient sell-out momentum,” although the spirits market overall continues to face challenges. Pernod’s sales declines were deepened by inventory adjustments, especially for Jameson and Absolut. For the full fiscal year, Pernod says it will focus on operations efficiencies, cash generation, and strategic investments below €900 million ($1.05b). As part of this pivot, Pernod in August announced the formation of new selling divisions in the U.S. and a shift in its route-to-market strategy, with changes including an enhanced focus on RTDs and emerging growth brands, as well as an expansion of its on-premise division.

“The major task is to continue to grow our mainline business with our great partners at Southern and RNDC and the like,” Pernod Ricard USA CCO Paul Basford told SND last month. “Jameson, Absolut, Malibu, Glenlivet, and others represent the bulk of our business. The brands within that mainline portfolio continue to need focused attention. Our Absolut, Malibu, and Jameson range of RTDs has been built to a scale where we can benefit from using a different route to market, going through a beer distributor network across eight states.”