Rémy Cointreau lowers sales outlook for 2024-25 amid double-digit declines in Q2
FRANCE – Rémy Cointreau, the French spirits group behind brands like Rémy Martin Cognac, has adjusted its sales forecast for the 2024-25 fiscal year after another quarter of substantial declines.
The family-owned business announced the launch of a €50 million (US$54.1M) cost-saving plan to counterbalance the persistent sales downturn affecting its major regions, particularly the Americas.
For the second quarter, Rémy Cointreau reported a 16.1 percent decline in organic sales, with a deeper 20.7 percent fall in Cognac sales. Other spirits in its portfolio also recorded a decline, falling 4.9 percent.
Due to these results, the group adjusted its outlook for the year from a “gradual recovery” to an anticipated “double-digit” decline.
“In this worsening economic environment, Rémy Cointreau remains determined to protect, as much as possible, its current operating margin in organic terms,” the company stated, emphasizing its strategy to implement tighter cost controls and continue with its new cost-reduction plan.
The move aims to mitigate the predicted decline in operating profit margin for the remainder of the fiscal year.
In the Americas, one of Rémy Cointreau’s largest markets, sales decreased by 22.8 percent, attributed mainly to destocking by retailers.
The Asia-Pacific (APAC) region recorded an 8 percent decline, influenced by weak market conditions in China.
Meanwhile, the Europe, Middle East, and Africa (EMEA) region saw slight improvement overall, although sales dropped by 18.8 percent.
The group’s total sales for the first six months of the year were €533.7 million (US$577.4M) in organic terms, reflecting a 15.9 percent decline.
Reported sales fell by 16.2 percent. Given these results, Rémy Cointreau revised its regional assumptions for the remainder of the year, citing limited visibility around the timing of recovery in the United States and worsened conditions in China.
The company does not expect sales growth in the Americas until at least the fourth quarter and anticipates further declines in the APAC region.
Additionally, China’s recent announcement of provisional tariffs on imported brandy has added another challenge. These tariffs are seen as retaliation to the European Union’s plan to impose tariffs on Chinese electric vehicles.
Rémy Cointreau stated that if the tariffs are confirmed, the impact on its 2024-25 financial year would be marginal, with the group prepared to activate a mitigation plan by 2025-26.
Despite the challenges, Rémy Cointreau views the current year as one of transition, hoping that destocking in the Americas will stabilize and noting optimism for longer-term growth by 2029-30.
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