Pernod Ricard SA cut its sales outlook on a slump in Cognac demand in China, a move seen by investors as a “realistic” step for the French spirits maker. Shares inched higher.

French drinks company Pernod Ricard cut its 2025 and longer-term outlook on Thursday, citing challenging market conditions in China, particularly for its Martell cognac brand. The company said it now expected a low single-digit decline in sales for 2025,

The liquor group lowered its expectations for its fiscal year, citing trade tensions and other uncertainties that continue to hit the spirits industry.

Pernod Ricard cut its sales forecasts for 2025 and beyond as tariffs weigh on the French spirits maker during an already tough time for the industry.