Remy Cointreau Reports Q1 Sales Dip Amid Hopes for US Rebound
WHAT YOU SHOULD KNOW
- Remy Cointreau’s Q1 organic sales dropped by 35% due to weaker US demand, high year-ago comparables, and destocking.
- The company expects a sharp sales rebound in the US from Q3, leading to flat organic sales and profitability for the full 2023/24 financial year.
- China’s strong recovery in demand for cognac, driven by bars, restaurants, and e-commerce growth, has positively impacted the company’s performance.
French spirits group Remy Cointreau reported a decline in first-quarter organic sales due to weaker demand in the US, high year-ago comparisons, and destocking. However, the company remains optimistic and expects a sharp sales rebound in the US starting from the third quarter. The maker of Remy Martin cognac and Cointreau maintains its forecast for flat organic sales and profitability for the full 2023/24 financial year, attributing the decline in sales in the first half to be followed by a strong recovery in the second half.
Sales for the three months ending June 30 amounted to 257.5 million euros, marking a 35% organic decline, which aligned with analysts’ consensus. Notably, sales in the cognac division saw a significant 44.7% organic fall during the quarter, driven by a massive decline in US sales, though there was double-digit sales growth in China due to a recovery in demand from bars, restaurants, and e-commerce.
Looking ahead, Remy Cointreau expects strong normalization of consumption in the United States throughout 2023-24 and anticipates substantial growth in the rest of the world, particularly in China. During the COVID-19 pandemic, the spirits industry, including Remy Cointreau and rivals like Pernod Ricard, benefitted from increased consumption of more expensive types of alcohol at home. However, signs of a slowdown in the spirits industry growth, especially in the US, have emerged as the positive effects from the pandemic wane.
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