Rémy Cointreau reports 21.5% drop in Q3 sales amid U.S. inventory adjustments, China slowdown
FRANCE – Rémy Cointreau has reported a 21.5 percent year-on-year decline in organic sales for its third quarter (Q3) and a 17.8 percent drop for the first nine months of its 2024-25 fiscal year.
For the nine months ended December 2024, the French spirits company recorded total sales of €787.8 million (US$819.4 million), with its Cognac division experiencing the steepest decline.
In the Americas, Rémy Cointreau faced a significant sales contraction due to ongoing inventory adjustments in the U.S. and a high comparison base from the previous fiscal year, when most shipments for the second half of 2023-24 took place in Q3.
The company does not anticipate growth in the region before the fourth quarter of 2024-25.
Sales in the Asia-Pacific (APAC) region also saw a sharp decline, attributed to challenging market conditions in China.
However, South-East Asia returned to growth, driven by strong performance in the Liqueurs & Spirits segment. The company expects a further sequential decline in APAC sales in the second half of the fiscal year.
The Europe, Middle East, and Africa (EMEA) region recorded a slight sales decline but showed improvement compared to Q2, supported by steady demand for Liqueurs & Spirits.
Nevertheless, Rémy Cointreau predicts continued subdued consumer trends in the region for the remainder of the fiscal year.
Cognac sales totaled €497.2 million (US$517 million) for the year to date, reflecting a 19 percent year-on-year drop.
In Q3, the division reported a 22 percent decline, generating €153.8 million (US$160 million) in sales. The company cited caution among distributors as a contributing factor, despite a rise in direct sales and resilience in e-commerce channels.
The ongoing anti-dumping inquiry by the Chinese Ministry of Commerce has further impacted Cognac sales.
Rémy Cointreau noted that if the proposed 38.1 percent tariffs take effect in October 2024, the impact on the current fiscal year would be minimal, with an action plan set for 2025-26.
Meanwhile, the Liqueurs & Spirits segment performed better than Cognac but still recorded a 14.9 percent decline in sales, totaling €274.2 million (US$285.1 million) for the first nine months.
Q3 sales fell by 20.1 percent to €91.6 million (US$95.3 million).
Rémy Cointreau reiterated its previously lowered full-year outlook, maintaining its €50 million (US$54 million) cost-cutting plan as it navigates challenging market conditions.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
