Rémy Cointreau is forecasting a “gradual recovery” in its sales and “protected” profitability in its new financial year in a set of guidance seen as subdued among analysts.

With Cognac accounting for around two-thirds of the French group’s sales, the Rémy Martin brand owner has suffered in recent quarters amid the category’s travails in the two largest markets for the spirit – China and the US.

Group sales for the year to the end of March were down 19.2% on an organic basis at €1.19bn ($1.3bn). Operating profit fell 31.6% to €291.6m, with the group’s underlying, “current” operating profit 29.1% lower at €304.4m. Net profit dropped 37.1% to €184.8m.

Rémy Cointreau did not put specific numbers on its forecasts for 2024/25 but predicted a “gradual recovery in sales in the course of the year and profitability protected”.

For the 2025/26 year, the Mount Gay rum and Bruichladdich whisky owner is forecasting a “return to high single-digit average annual sales growth” with a “gradual improvement in current operating profit margin on an organic basis”.

Discussing Rémy Cointreau’s full-year results with analysts today (6 June), CEO Eric Vallat said the group had a “challenging year” but added the company “moved swiftly to adapt our costs and optimise our structure”.

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Globally, Rémy Cointreau’s Cognac sales fell 25%, with volumes down nearly 30%. The company pointed to a “significant decline in sales in the Americas” but “resilient sales” in APAC and EMEA.

For the coming year, the distiller is putting a focus on VSOP and is taking steps to try to boost volumes in the US.

Vallat said Rémy Cointreau did not “activate” its VSOP brand enough last year, while it was also increasing prices.

To remedy this, VSOP promotions will be rolled out in “key” US cities and states.

Vallat said the company would push for “a smart retail price, bearing in mind psychological thresholds”. Those efforts would not impact “average” prices but the changes would cause varying price drops and increases across US markets.  

Meanwhile, to meet consumers who are spending less, Rémy Cointreau is releasing a 375ml format of its VSOP brand to entice “downtrading” consumers.

Speaking on sales data for May and June, Vallat said the figures were in line with anticipated figures, with “no bad surprise” but “no good surprise either”.

He added: “We don’t see an improvement on the depletions in the US but we don’t see a deterioration either.”

Rémy Cointreau said it would “incentivise” its distributors to focus on VSOP but didn’t detail how it would do so.

The group, meanwhile, has reshaped its structure in the US and reduced staff by 10%. It has deployed a two-division sales structure to simplify processes and implement faster decisions.

China and e-commerce growth

Despite the “challenging” Chinese New Year, the group is “quite confident” in its ability to grow in the country and said it is looking forward to a few key events.

One such “big day” is the e-commerce shopping festival known as 618. It was originally created by JD.com in 2010 and takes place on 18 June.

Rémy Cointreau said e-commerce was a point of growth for the company in China.  

“We expect China to keep growing and to keep growing at a faster pace than our total sales,” Vallat said.

Rémy Cointreau’s CEO told investors that he was a bit more “negative” on China’s on-trade for the short term as it was still in “recovery mode”.

In a note to clients, analysts at AllianceBernstein wrote: “This ends a very difficult financial year for Rémy Cointreau but with no signs of a recovery so far. The group had reached the low end of the sales growth guidance and had guided for a ‘contained’ decline in operating profit. Earnings were a bit ahead of consensus expectations but not enough to spark hope for investors.”

They added: “Rémy Cointreau did not provide numerical guidance for fiscal year 2025 but indicated they expect sales to gradually recover, especially in H2 as comps ease. Management indicated that US depletions are still negative with remaining excess inventories. The group believes it will resume the trajectory in fiscal year 2026 towards the long-term targets of high single-digit organic sales growth, with gradual margin expansion.”

The analysts at AllianceBernstein have an ‘outperform’ rating on Rémy Cointreau’s shares “based on a very attractive valuation and our view that Cognac is not structurally impaired”,. However, they said they “acknowledge the lack of visibility in the short-term”.