What's going on?

Pernod Ricard�s going to regret this in the morning: the French alcohol giant � owner of Absolut vodka and Jameson whiskey � reported a huge profit hit on Wednesday.

What does this mean?

You might feel as though you�ve been knocking back more liquor than ever in your own home, but spending in two less-frequented areas � bars and duty-free stores � took a double-measure-sized dent last quarter. The drop in sales to nearly non-existent air travelers was so steep, in fact, that Pernod �wrote down� its value by $1.2 billion. In other words, it reassessed the value of its various parts and realized they � or more specifically, former window-shopper staple Absolut � were worth less than before. And that�write-down saw profit for the year through June fall 77%, with sales in the COVID-ravaged final quarter sliding by a third.

Why should I care?

For markets: Claims to fame.
Pernod also had a headache in the form of a pre-pandemic booze industry trend: drinkers� growing preference for smaller �craft� brands like Redbreast whiskey and Altos tequila over household names like Martell cognac. Sales of those specialty labels climbed 7%, while every other category fell. It’s this shift that pushed Britain�s Diageo � Pernod Ricard�s even bigger rival � to slam down $1 billion for George Clooney�s Casamigos tequila in 2017, and then follow up last month with $610 million for a gin brand part-owned by Ryan Reynolds.


Zooming out: That�s the spirit.
Pernod�s results might�ve looked worse for wear, but the company�s profit didn�t decline as much as it�d forecast in July, helping its shares climb almost 3%. Another struggling company pulled off the same trick on Wednesday: US department store operator Macy�s saw its shares rise after reporting a not-quite-as-dire-as-expected quarterly loss. And while Pernod may be desperate for a return to normal life, Macy�s has spotted a silver lining: people are buying more jewelry and perfume as gifts now there aren’t as many concert tickets and cookery courses on offer.