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Rémy Cointreau Q1 sales drop 15%
There is no sign of let up for Rémy Cointreau as its troubles from last year have continued into the first quarter (Q1) of 2024-2025, with the French firm posting a 15.6% decrease in sales.
The company reported that its revenue for the first quarter (April-June 2024) was at €217 million (US$235m), which was down from the €257.5m (US$279m) figure in the same period in 2023.
Cognac dipped from €155.1m (US$168.2) to €135.5m (US$147m, and a 12.2% organic decline), while the liqueurs and spirits division went from €95m (US$103m) to €75.8m (US$82.2 and a 20.4% drop).
For the year ending March 2024, Rémy Cointreau’s organic revenue reached €1.19 billion (US$1.28bn), a near 20% fall from the previous year. For 2024 and beyond, it expected to see ‘contained organic decrease in current operating profit (COP) margin’.
The Americas bore the brunt of most of the poor performance which the company attributed to continued destocking. For Cognac in the region, which makes up 30% of the company’s Cognac sales, there was an approximate 45% year-on-year decrease versus the pre-pandemic numbers for Q1 2019-2020.
Other factors cited for the struggles along with destocking were a ‘fiercely promotional environment’ and ‘depressed consumer demand’.
In its other key Cognac market, China, sales were flat but the company did note that high-end products were underperforming.
Overall, for the rest of the Asia Pacific region (APAC), Q1 sales results in Australia, Malaysia and Singapore were down, however in Japan there was ‘strong growth’ – driven by demand for Bruichladdich whisky.
Meanwhile, sales in Europe, the Middle East and Africa (EMEA) were also in decline – affected by ‘soft consumer trends’ and a phasing effect in Europe – and South Africa and Germany in particular were singled out for its double-digit sales decreases.
In its third-quarter results for 2023/2024, partner brands were down by 13% on an organic basis. This has fallen even further in Q1 2024-25, by 24.6%, due to ‘adverse trends’ in Benelux countries and in the UK.
Despite the results, Rémy Cointreau predicts a gradual recovery for the rest of the year and believes that the end of destocking in the Americas (also expected this year) will see a return to organic high single-digit growth in 2025-2026.
To curb the negative performance in the US, the company will execute a plan to boost sales that includes pushing cocktails made with Cointreau, improving visibility for its Rémy Martin VSOP and using the Mount Gay Navy Strength to ‘increase profitability and visibility’.
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