Remy Cointreau delivers gloomy outlook as H1 sales drop

Remy Cointreau reported a double-digit decline in sales in the first half as revenues continued to drop in the Americas and China, with the French spirits maker predicting a significant drop in margins for the full year.

The company confirmed on Thursday that it now expects a 15-18% decline in organic sales over the financial year ending March 2025, having previously pointed to a "double-digit decline".

Meanwhile, the current operating profit margin is tipped to be between 21% and 22% on an organic basis, compared with earlier guidance of simply a "deterioration" from last year's level of 25.5%.

Group sales totalled €533.7m in the six months to 31 March, down 16.2% on a reported basis and 15.9% lower organically.

Organic cognac sales were 17.5% lower due to a 14.2% drop in volumes and a 3.3% negative impact from pricing, mainly due to ongoing inventory adjustments in the Americas which it blamed on the "normalisation of consumption, high interest rates, and a fiercely promotional environment".

In the liqueurs and spirits division, organic sales were 12% lower than last year due to a tougher market in the Americas, a slowdown in the whisky category in China, and lower consumption in Southeast Asia.

The current operating profit for the half was €147.3m, down 12.9% on last year, as the decline was slightly mitigated by an improvement in the current operating margin to 27.6% from 26.6%.

"In a complex economic and geopolitical context, Rémy Cointreau was able to hold margins steady in the first half of the year through rigorous cost management and our now more agile organisation, said chief executive Éric Vallat.

Looking ahead to the second half, Rémy Cointreau said it expects no return to growth in the Americas before the fourth quarter at the earlier. Meanwhile, the company is predicting a sequential sales deterioration in APAC in the second half, and "continued subdued consumer trends" in the EMEA region.