Moët Hennessy, Rémy Cointreau Post Better Than Expected Results Amid Cognac’s Slump
January 26, 2024While sales have continued to decline for top Cognac brands Hennessy and Rémy Martin, brand owners Moët Hennessy and Rémy Cointreau each beat expectations in results overnight. As a result, LVMH’s shares jumped 12% while Rémy Cointreau was up 13% in European trading today.
At Moët Hennessy, fourth-quarter wine and spirits sales grew 4% organically, with Cognac turning positive at 1.9%, in a welcome sign for the category. Still, the double-digit declines of Hennessy in the earlier parts of the year led Moët Hennessy’s full-year sales to decrease 4% to €6.6 billion ($7.2b), with profit from recurring operations down 2% to €2.1 billion ($2.3b).
“In the first part of the year, Hennessy experienced a significant slowdown in sales in the United States, although the situation gradually recovered at the end of the year,” the company noted. According to Impact Databank, Hennessy’s U.S. depletions slipped 6% for the year to 3.5 million cases, but the brand remains the third-most-valuable spirit brand in the market in retail dollar terms at $2 billion.
Overall, Moët Hennessy’s Cognac & Spirits division was down 10% organically in 2023, as the company added that Glenmorangie and Ardbeg Scotch whisky sales were affected by market conditions in the U.S. and China, while remaining substantially above pre-Covid levels. Meanwhile, Woodinville Whiskey expanded its presence to 35 U.S. markets and Volcán de mi Tierra made progress in ultra-premium Tequila.
On the Champagnes & Wines side, Moët Hennessy saw sales grow 2% last year. The Veuve Clicquot and Moët & Chandon brands combine for approximately 1.2 million cases in U.S. volume, leading the U.S. Champagne market by a wide margin, according to Impact Databank. Moët Hennessy said Moët & Chandon benefited from the launch of its Grand Vintage 2015 in the first half of the year, Dom Pérignon had a record year with the release of two new vintages, and Veuve Clicquot saw an “exceptional performance,” buoyed by the debut of its La Grande Dame 2015.
At Rémy Cointreau, sales for the nine months through December fell 23% to €957 million ($1b), including a 24% decline in the most recent quarter, despite a sequential improvement in the Americas. The company, which has aimed to hold pricing amid discounting in the wider Cognac category, said Rémy Martin slid amid an “intense promotional environment” in the U.S. The brand has been at approximately 1 million cases in the U.S. recently, according to Impact Databank.
On the brighter side, the Liqueurs & Spirits division—featuring brands like Cointreau, The Botanist Gin, and Bruichladdich—saw 4.3% growth in the most recent quarter, driven by “good momentum and positive phasing effect in the United States.”—Daniel Marsteller
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