Rémy Cointreau FY sales fall by nearly 20%

French firm Rémy Cointreau saw sales slump by 19.2% in the year ending March 2024, with organic revenue totalling €1.19 billion (US$1.28bn).

Compared with its pre-pandemic results from 2019-20, however, sales were up by 16.2%.

On a reported basis, sales were down by 22.9%.

Sales in the final three months of the year (Q4) were nearly flat, falling by 0.7% in organic terms.

The results indicate a continued downward trend for the firm, which saw sales fall by 23.5% in its Q3 results. In those results, the firm amended its full-year guidance, predicting a decline of 20%.

For the full year, the firm saw growth in Asia Pacific (APAC) and Europe, the Middle East and Africa (EMEA) of 2% and 0.7% respectively.

It also added that stocks normalised in Q4 following shipment declines in Europe and China in the previous quarter.

However, sales in the Americas fell by 39.6%, which the firm said reflected “continued major destocking in an environment marked by inflation, more intense promotions, and strong post-Covid normalisation of consumption”.

Sales by category

Cognac fared particularly badly, with organic sales falling by 25.1% on the previous year (-29.2% on a reported basis).

However sales were up by 5.8% on FY2019-20.

The division saw an uptick of 15.4% in Q4, driven by a significant increase in China and slight growth in EMEA. The firm cited Chinese New Year as a revenue driver in the period.

Earlier this year, China launched an anti-dumping investigation into EU brandy. Rémy Cointreau did not address the investigation in its results although, in its previous results, it confirmed it is “cooperating fully with the Chinese authorities”.

Liqueurs and spirits suffered less for the full year, with organic sales falling by 4.6% (7.4% on a reported basis). Conversely to Cognac, the division had a difficult Q4, with organic sales falling by 27%.

The firm cited “negative phasing effects” in the US and said the group had “deliberately opted to complete most of its shipments in the third quarter”.

It added that there was a “steep improvement” in EMEA, with a decline in APAC due to a “slowdown in whisky sales in China”.

For the full year, partner brands dropped by 19.2% (-22.9% on a reported basis), although the fall was only 1.1% in Q4.

2024 and beyond

The firm stated that it had ‘protected its profitability and investment capacity through tight cost controls’ in 2023-24 and will continue to do so as part of its medium-term plan.

The group expects to see ‘contained organic decrease in current operating profit (COP) margin’ due to its cost-cutting plans and estimates around €100m (US$107m) in savings this year, with €25m (US$26.8m) already achieved in the first half of the year.

It also anticipates that exchange rates will cut COP by between €7m (US$7.5m) and €10m (US$10.7m) in 2023-24.