- Three-month sales plunge 23.5% to EUR319.9m (US$347.6m)
- Cognac sales in quarter decline 33.9%
- For the nine months to end of December, top line comes in down 22.7% at EUR956.6m
Positive noises are beginning to emanate from Rémy Cointreau, despite a harrowing set of numbers from the fiscal third quarter.
Following on from the 22.2% sales slide from the six months to the end of September, announced late last year, the group today posted a fall of almost 24% in the final quarter of 2023, its fiscal Q3. Subsequently, Rémy Cointreau has gone into the last quarter of its fiscal 2024 with a top line almost 23% below the corresponding period a year ago.
The firm’s cognac division – representing almost two-thirds of group sales – was awash with bad news, down by 33.9% in the three months due to “major destocking in China and a persistently sluggish market in the US”. Despite this, Rémy Cointreau noted “sequential improvement” in the US in the near term, “driven by [a] positive phasing effect”.
The upbeat comments on the US were partially offset by Asia Pacific, where the forementioned issues in China contributed to a “very strong double-digit [sales] decline” in the quarter. Commenting separately on the anti-dumping investigation into European brandy started by Chinese authorities this month, the group said it remains “convinced that its products and business practices comply fully with Chinese … regulations”.
Elsewhere, the smaller ‘liqueurs & spirits’ division, which includes the likes of Cointreau and Bruichladdich, came in up 4.3% in Q3. Returning to the negative tone, however, the group noted “slowed growth in demand in the whisky category in China”.
“Rémy Cointreau is ahead of its strategic plan … ,” the company said. “This makes 2023-24 a year that will allow the group to return cognac inventories in the US to healthier levels and absorb the effects of post-Covid normalisation before heading into 2024-25 in the best possible conditions.”
For the full fiscal year, the group now expects sales to hit the lower end of the -15%-to-20% range it was forced to revise late last year.
Investors appear to have bought into the narrative that the worst is behind the company: Share trading following today’s results announcement – which is not included in the graph below – hit a new high for the calendar year so far, up 16% at 03:20 CET on yesterday’s close. One investment analyst described the latest figures as “very weak but no worse than expected”.
“The US cognac market is showing some signs of improvement in the published data,” wrote Trevor Stirling from Bernstein today. “Rémy Cointreau’s rate of decline is slowing, but it is still too early to call the bottom.”
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