Remy Cointreau Braces For Sharp Drop In Annual Sales

Remy Cointreau has warned investors of a larger-than-expected decline in annual sales, citing weakness in its key U.S. market, where inflation has dampened demand, and potential tariffs could further impact the spirits maker, Dominique Vidalon and Emma Rumney reported for Reuters.

The maker of Remy Martin cognac and Cointreau liqueur has repeatedly reduced its guidance over the past year due to steep declines in cognac sales. I Photo: Remy Cointreau Facebook

The French group is also affected by a slowdown in China and now expects total group sales to decline between 15% and 18% in its fiscal year ending in March.

This forecast surpasses the 10.6% decline predicted in an LSEG consensus of analysts and follows a 19.2% drop in sales in the previous fiscal year. "Doing business is becoming increasingly difficult for Remy," Barclays analysts noted.

"Remy is increasing its promotional activity ... but sales of Remy Martin are still consistently declining."

The maker of Remy Martin cognac and Cointreau liqueur has repeatedly reduced its guidance over the past year due to steep declines in cognac sales, causing its shares to fall by around two-thirds this year to their lowest level since 2016.

Shares fell as much as 4% following the new guidance.

In October, Remy abandoned hopes of a sales recovery this year amid particularly weak sales in the U.S., where high interest rates and inflation have led retailers to reduce their spirits stock.

Cost-cutting measures, which helped cushion the impact on first-half operating profit, will continue into the second half of the year, the group said. Its first-half profit fell by 17.6% on an organic basis, compared to the 20.6% decline expected by analysts.