On Wednesday, French spirits group Rémy Cointreau officially abandoned its 2030 sales growth ambitions, citing a combination of protectionist tariffs and persistently weak U.S. sales.
The company behind iconic brands like Rémy Martin cognac and Cointreau liqueur acknowledged that its previously stated goal of high-single-digit growth was no longer realistic in today’s environment.
Despite the sobering outlook, Rémy’s stock surged nearly 6%, buoyed by a sense of optimism from company executives. Outgoing CEO Eric Vallat, in his final results presentation, expressed cautious confidence that the most difficult period was over: “We believe this difficult phase is now behind us,” he said, while also noting that the current market conditions no longer provide the “necessary conditions” to sustain long-term growth targets.
Vallat’s successor, Franck Marilly, a seasoned executive from the luxury sector, is expected to develop a new strategic roadmap that reflects the shifting dynamics of the global spirits market. Rémy Cointreau’s decision aligns with recent moves by other major players in the industry, including Diageo and Pernod Ricard, both of which have scaled back overly optimistic sales forecasts amid a sector-wide slowdown.
Rémy has been hit harder than its peers, with 70% of its revenue dependent on cognac, mainly sold in the U.S. and China — two markets where brandy consumption has waned significantly. Adding to the strain are punitive tariffs: China’s proposed steep duties on EU brandy, combined with existing U.S. tariffs of 20% on EU imports and 10% rates on spirits from the UK and Barbados, could cost the company an estimated EUR 65 million in operating profit, even after mitigation measures.
Still, there are signs of resilience. According to Barclays analyst Laurence Whyatt, clearer visibility on tariff impacts and recent efforts to streamline the business have helped improve investor sentiment. “Any improvement on tariffs is upside,” he said.
Rémy’s leadership has taken decisive action to adapt:
- Headcount has been reduced by 9% compared to 2022/2023.
- The company is cutting eau-de-vie (unaged brandy) purchases by up to 45%.
- In the U.S., inventory levels have dropped by EUR 60 million, bringing them to values lower than those recorded in 1920.
Even without a full rebound in U.S. cognac demand, Rémy expects to return to mid-single-digit sales growth in the 2025 financial year, thanks largely to a more favorable year-on-year comparison after a difficult 2024. For the fiscal year ending in March 2025, operating profit fell 30.5%, though the result slightly beat market expectations.
Looking ahead, Rémy Cointreau faces a new chapter under new leadership and changing market dynamics. The company will now focus on navigating geopolitical headwinds, adjusting to evolving consumer habits, and rebuilding momentum in its core markets.
Source: Reuters