- Sales in three months to end of September decline 10.8% to EUR408m [US$430.4m]
- Fiscal first half tumbles -22.2% to EUR674.5m
- Cognac sales -17.8% in the quarter, -30.1% in H1
- Sales forecast for financial 2024 – to end of March – reset to between -15% and -20%
Rémy Cointreau has been forced to redraw its sales forecast for the current financial year after a second quarter of negative growth.
The Rémy Martin brand owner today followed Q1’s -35% sales showing with a near-11% fall in sales from the three months to the end of September. Consequently, the previous estimate of a flat top-line for fiscal 2024 has been revisited; sales for the 12 months to the end of March next year are now expected to be down year-on-year by between 15% and 20%.
In the three-month period, Cognac sales for the group came in down 17.8% on the year prior, though this represents an improvement on the previous quarter's -44.7% for the flagship division. The main drag for Rémy Martin continues to be the US, where the company's Cognac Q2 sales fell by almost a third. Rémy Cointreau admitted that the country is suffering from "tougher market conditions" exacerbated by both destocking at the distribution level due to higher interest rates as well as "persistent market promotions" while Rémy Martin "maintained its prices".
The other main market for the Cognac brand, China, delivered a high single-digit sales rise for Rémy Martin, although "recovery post-Covid is slower than expected due to soft consumer confidence".
Rémy Cointreau's 'Liqueurs & Spirits' unit, on the other hand, is in a far healthier state, with sales in the three months climbing 12.1%, reversing the previous quarter's -11.4% performance. Stand-outs were single malt Bruichladdich, Cointreau liqueur and The Botanist gin, with Cointreau up 9.2% in the US over the three months. The three brands also did well in EMEA with the unit generating "strong growth" in Europe, although this was skewed slightly by restocking effects in the UK ahead of the alcohol duty increase at the start of August.
The forecast redraw, based on the figures for the first half of fiscal 2024, referenced growth going forward, albeit on a slower timeline than first hoped. "The rebound in [US] sales initially expected for the third quarter [to the end of December] is now anticipated in fiscal 2025," Rémy Cointreau said. China's lumbering economic exit from the pandemic was also factored in the negative numbers.
The stock market reacted as expected to today's news, with Rémy Cointreau’s share price hitting its lowest point since February 2020.
Speaking to Global Drinks Intel earlier this month, CEO Eric Vallat credited the group's majority shareholder, the Heriard Dubreuil family, with holding a long-term view of the business. "The first thing they told me [when I started in December 2019] was that whatever happened, they wanted me to keep working on my ten-year vision," he said.
Rémy Cointreau’s official fiscal Q2 results announcement.
