Organic sales for Rémy Cointreau fell by double digits for the second quarter in a row, with sales for the first half of the year (H1) reaching €533.7 million (US$577.6m).
H1 sales were down by 15.9%, while Q2 sales were down by 16.1%.
The results follow a disappointing 2022-2023 fiscal year, when sales slumped by 19.2%.
Sales were particularly affected in the Americas, falling by 22.8% organically, with the firm citing continued destocking but a ‘sequential improvement’ in depletions.
Sales in the Asia-Pacific (APAC) region also fell by 8%, ‘reflecting a high basis of comparison and tougher market conditions in China’, as well as ‘slack consumption in Southeast Asia’.
Europe, the Middle East, and Africa (EMEA) sales also fell by double digits, down by 18.8%, ‘reflecting persistently variable consumer trends’.
Disappointment for every division
Every division in the business experienced losses, with Cognac and ‘partner brands’ worst affected.
The firm’s Cognac sales fell by 17.5% to €341.5m (US$369.7m) in H1, with Q2 sales down by 20.7%.
The firm said China showed limited decline despite a high basis of comparison, but Southeast Asia fell sharply due to ‘fierce promotional conditions’.
Cognac in the US was hit by destocking and a ‘market impacted by the normalisation of consumption and high interest rates’. Europe was cited as another ‘highly promotional market’, while Africa suffered from destocking, linked to a change in distribution in Nigeria.
‘Partner brands’ fell by 25% in H1 and by 25.4% in Q2. The firm did not elaborate on the division’s performance.
The group’s remaining division, Liqueurs & Spirits, fell by 12.1% in H1, but was down by only 4.9% in Q2. The firm cited a ‘slight’ rise in sales in EMEA owing to summer campaigns for Cointreau and Metaxa, with Germany, France, Greece and Spain all outperforming expectations.
In APAC, sales also declined, with the firm pointing to ‘weak consumer trends in Southeast Asia and ongoing adjustment of whisky stocks in China’. Conversely, Japan experienced ‘strong’ growth driven by Bruichladdich and Cointreau.
The firm has adjusted its guidance for the full year and now expects a double-digit decline in organic terms. In its Q1 results, it had predicted a gradual recovery for the rest of the year.
By region, it expects no return to growth for the Americas before Q4. APAC is anticipated to decline in H2, while the firm expects ‘continued subdued consumer trends’ in EMEA.
The firm has committed to a cost-cutting strategy that totals more than €50m (US$54m).
The group also acknowledged recent decisions by the Chinese Ministry of Commerce (Mofcom) to apply duties of 38.1% on EU brandy from 11 October. It stated the impact ‘would be marginal for the 2024-25 fiscal year, and the group would activate its action plan to mitigate the effects from 2025-26’.
Remy Cointreau hopes for high single-digit annual growth in sales in 2025-26, which would steer the group toward its financial targets for 2029-30.
Read Full Story at source (may require registration)
Author: Lauren Bowes
