Rémy Cointreau Sees U.S. Sales Improve, But China Weighs Down Results

Rémy Cointreau saw sales decline 4% on an organic basis to €490 million ($566m) in its fiscal first half ended in September as an improvement in the U.S. was offset by tough conditions in China. Rémy’s second-quarter sales fell 11%, leading the company to lower its full-year guidance due to the “deterioration of market conditions in China and the weaker-than-expected rebound in sales in the United States,” with the company now targeting organic sales to come in stable or up by low single-digits, with operating profit down low double-digits to mid-teens.

Rémy’s flagship Cognac division saw first-half sales slip 8% to €300 million ($347m), despite “strong sales growth in the U.S. for the second consecutive quarter, driven by low comps and improved depletions.” While boosted by improvement in Rémy Martin VSOP, value depletions are still trending negative by mid to high single-digits, with volume down low to mid single-digits year-over-year. Meanwhile, the Cognac unit was hit by a “sharp downturn” in the China market, with the high end leading declines.

Rémy’s liqueurs & spirits division was up 4% to €183 million ($211m) in the first half, but declined 5% in the second quarter. U.S. results were on a similar trajectory, with sales down mid single-digits in Q2 after a high single-digit increase in the first quarter, owing to shipment phasing. Still, the company said “key brands Cointreau and The Botanist both delivered a solid performance over H1, supported by resilient depletions, the success of their latest campaigns, and the recent launch of the RTS Cointreau Citrus Spritz.” Cointreau and The Botanist have posted flat value depletions year-over-year in the first half.

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