Rémy Cointreau has released its financial results for the first half of fiscal year 2025–26, reporting a decline in sales and profitability amid adverse market conditions, increased customs duties, and unfavorable currency movements.
Despite the tougher environment, the group has reaffirmed its full-year objectives and outlined a new strategic direction under the leadership of its recently appointed CEO, Franck Marilly.
Sales Down but Above Pre-Pandemic Baselines in Key Metrics
Consolidated sales for the period totaled EUR 489.6 million, a decline of –4.2% on an organic basis and –8.3% as reported, driven by a –4.1% negative currency effect. Gross margin contracted by –2.4 points on an organic basis, reaching 68.0%, although still surpassing the margin level achieved in 2019–20.
The group maintained a high level of investment in marketing and communications, allocating 19.4% of sales, a ratio notably higher than in the 2019–20 period. At the same time, Rémy Cointreau continued to exercise firm control over overheads, reducing them by –6.4% on an organic basis.
Current Operating Profit (COP) reached EUR 108.7 million, down –13.6% organically, with a current operating margin of 22.2%, representing a –2.7-point organic decline. Free Cash Flow improved compared with the prior year, recording –EUR 16.5 million vs. –€35.6 million in H1 2024–25.
The group has confirmed its 2025–26 guidance:
- Sales: organic growth expected between stable and low single digits
- COP: organic decline projected between low double digits and mid-teens
CEO Franck Marilly: “The Start of a New Era”
In his first financial commentary since assuming the role in June, CEO Franck Marilly described the half-year as challenging but also as the beginning of a strategic reset for the company.
Marilly outlined five key levers to restore agility and performance across the organisation:
- Adapting the group’s structure
- Rebalancing commercial resources
- Re-expressing brand identity and DNA
- Sharpening the value-driven strategy
- Reevaluating the investment model to prioritize high-impact initiatives
He stressed the importance of immediate value-creation actions, particularly innovation aligned with consumer expectations and enhanced pricing agility.
“We have everything we need to succeed: a unique portfolio, iconic brands, and committed teams. The levers, energy, and determination are all in place to set Rémy Cointreau back on the path to lasting value creation,” Marilly affirmed.
Cognac: Pressure from China and Duty-Free Restrictions
The Cognac division experienced a –7.6% organic decline in sales. This figure masks contrasting trends:
- Volumes grew +0.7%,
- but the price mix dropped –8.4%, reflecting market pressure.
Regional trends:
- APAC: Significant decline due to the tougher market environment in China and the ongoing inaccessibility of Chinese duty-free channels.
- Americas: Strong growth, supported by favorable comparisons and improved depletion trends.
- EMEA: Decline driven by intense promotions and more cautious consumer behavior.
Current Operating Profit for Cognac was EUR 87.8 million, down –18.3% organically, with a margin of 29.3% (–4.3 pts). Gross margin remained high but still fell –4.4 points organically due to:
- Higher production costs
- Unfavorable price/mix
- Incremental customs duties
Marketing spend increased proportionally (+0.3 pts), while overheads decreased (–0.4 pts organically), partially mitigating the profit hit.
Liqueurs & Spirits: Strong Momentum Across Markets
The Liqueurs & Spirits division posted a robust +4.1% organic sales increase, driven by:
- +5.2% volume growth,
- –1.0% price mix.
Regional highlights:
- Americas: Strong growth, led by Cointreau and The Botanist.
- EMEA: Mixed performance across countries.
- APAC: Exceptional performance, especially in China and broader Asia.
Current Operating Profit rose +9.9% organically to EUR 29.8 million, with margin improving +0.9 pts to 16.3%.
Gross margin remained stable, as lower production costs offset a rise in marketing spending. Overhead costs dropped sharply (–1.9 pts), fully compensating increased brand investments.
Partner Brands: Significant Decline
Sales in the Partner Brands portfolio declined –35.7% organically.
Current Operating Profit stood at –EUR 0.5 million, essentially unchanged from –EUR 0.6 million a year prior.
Consolidated Results and Currency Impact
At group level, Current Operating Profit fell –26.2% as reported (–13.6% organic). The decline reflects:
- Lower profitability in Group Brands
- Negative contribution from Partner Brands
- A small reduction in holding costs (–2.2%)
Currency effects weighed heavily, with a –EUR 18.7 million impact stemming primarily from:
- A weaker US dollar (EUR/USD moving from 1.09 → 1.15)
- A weaker Chinese renminbi (EUR/CNY moving from 7.84 → 8.28)
Gross margin remained solid at 70.1% organically, still above pre-pandemic levels, but fell due to:
- Incremental customs duties
- Unfavorable price/mix
- Higher production costs
Marketing investments rose by 0.9 points, while overhead ratios declined 0.6 points, reflecting ongoing cost discipline.
Outlook: Transformation Expected to Drive Second-Half Recovery
Despite the soft first half, Rémy Cointreau remains confident in delivering stable to low single-digit organic sales growth and managing profitability within the targeted decline range for the full year.
Central to this outlook is the group’s transformation plan, which aims to:
- Reinforce brand equity
- Strengthen pricing power
- Reallocate commercial resources
- Prioritize high-return investments
The company is also preparing for innovations aligned with evolving consumer preferences and ready to leverage improved demand trends in key regions, particularly in the Americas.
Backed by strong brands, disciplined cost management, and a clear strategic agenda, Rémy Cointreau positions this half-year not simply as a setback, but as a turning point toward long-term value creation.
Source: Rémy Cointreau