French group Rémy Cointreau has reported a significant drop in sales for the first quarter of the 2024-2025 financial year. The decrease, greater than expected, is attributed to difficulties in its main markets. Despite this unfavorable context, Rémy Cointreau is maintaining its annual targets, betting on a gradual recovery in business.
Rémy Cointreau, the French spirits manufacturer, announced on Wednesday July 24 a larger-than-expected drop in sales for the first quarter of the 2024-2025 financial year.
This is mainly due to persistent difficulties in its main markets, the United States and China, as well as a deterioration in consumption in South-East Asia.
Group sales for the quarter ended June 30 totaled 217 million euros, down 15. 6% on an organic basis. This performance was slightly below analysts’ expectations, who had forecast a 13.6% drop to 220.4 million euros according to a consensus provided by the company.
Reported sales fell by 15.7%, including a negative currency effect of -0.1%, mainly linked to the evolution of the Chinese renminbi.
Cognac performs well
The cognac division, which accounts for around 70% of Rémy Cointreau’s sales, performed better than expected. Sales fell by 12. 2% on an organic basis, against an expected decline of 17.4%.
However, demand for cognac in the United States continues to slow, exacerbated by inventory reductions at retailers and wholesalers, as well as aggressive promotions by competitors. In China, the market remains sluggish, although the situation is slightly better with an “almost stable performance” year-on-year.
On the other hand, sales in the liqueurs and spirits division, which includes brands such as Cointreau, The Botanist gin and Bruichladdich whisky, fell sharply by 20.4%, more than double the 8.2% drop forecast by consensus.
This division was particularly affected by the deterioration in consumption in South-East Asia, and by increased promotional activity by competitors in Europe, where sales also fell significantly due to inflation.
Targets maintained despite market slowdown
Spirits manufacturers, including Rémy Cointreau, are experiencing a slowdown in sales following the post-COVID boom, when consumers turned to more expensive spirits, leading producers to raise their prices. Despite these challenges, the Group is maintaining its annual forecasts and expects a gradual recovery in business by the end of the year.
“Rémy Cointreau is determined to protect its profitability through rigorous cost control,” stresses the company, which intends to maintain its margin “through a measured and selective increase” in prices and “moderate inflation” in its costs. It anticipates a “gradual recovery” in business during 2024-2025, hoping for a return to sustainable growth from 2025-2026, in line with its 10-year strategic plan.
Rémy Cointreau is going through a difficult period. However, the Group remains optimistic that the situation will gradually improve. The period 2024-2025 is seen as a transitional year with a view to stabilizing and relaunching growth in the medium term.
Discover our plans Subscribe for 1€ Become an active member of the community of luxury leaders.
To continue reading this article, subscribe or log in to your account
Read also>RÉMY COINTREAU PRESENTS DISAPPOINTING ANNUAL RESULTS
Featured photo : © Rémy Cointreau
