FRANCE – Rémy Cointreau has announced a 15.6 percent decline in sales for the first quarter of the 2024-2025 fiscal year, with revenue dropping to €217 million (US$235.4 million) from €257.5 million (US$279 million) in the same period last year.
The Louis XIII Cognac maker attributed this decline to ongoing destocking and lower depletions in key markets, particularly in the United States.
The company’s Cognac segment saw sales decrease from €155.1 million (US$168.2 million) to €135.5 million (US$147 million), representing a 12.2% organic decline.
The liqueurs and spirits division also experienced a significant drop, falling from €95 million (US$103 million) to €75.8 million (US$82.2 million), marking a 20.4 percent decline.
For the fiscal year ending March 2024, Rémy Cointreau reported an organic revenue of €1.19 billion (US$1.28 billion), nearly 20 percent lower than the previous year.
The company expects a contained organic decrease in its current operating profit (COP) margin for the 2024 fiscal year and beyond.
In the Americas, which constitute 30 percent of the company’s Cognac sales, there was an approximate 45 percent year-on-year decrease compared to pre-pandemic figures for Q1 2019-2020.
Rémy Cointreau linked this decline to “ongoing destocking in the face of persistently lower depletions” in US wholesale sales to retailers. Additionally, the company has faced a “fiercely promotional environment and depressed consumer demand” in the US market.
Sales in China remained flat, although high-end products underperformed. In the broader Asia Pacific region, sales results in Australia, Malaysia, and Singapore declined, while Japan experienced strong growth driven by demand for Bruichladdich whisky.
Sales in Europe, the Middle East, and Africa (EMEA) were also down due to “soft consumer trends” and a phasing effect in Europe. South Africa and Germany were highlighted for their double-digit sales decreases.
Partner brands, including the Passoã liqueur, saw sales fall by 24.3 percent on a reported basis and by 24.6 percent on an organic basis to €5.7 million, primarily due to adverse trends in the UK and Benelux.
Despite these setbacks, Rémy Cointreau predicts a gradual recovery for the rest of the year. The company expects the end of destocking in the Americas to lead to a return to organic high single-digit growth in 2025-2026.
To curb negative performance in the US, the company plans to boost sales by promoting cocktails made with Cointreau, enhancing visibility for Rémy Martin VSOP, and utilizing Mount Gay Navy Strength to increase profitability.
The company expects the 2025-2026 financial year to resume its growth trajectory and targets for 2029-2030. Over the next five years, the company aims for “high single-digit annual growth in sales on average and on an organic basis,” along with a “gradual organic improvement in current operating profit margin.”
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