Remy Cointreau raises profit forecast as US tariffs ease after EU agreement

French spirits producer Remy Cointreau announced on Friday that it has raised its annual profit forecast, citing a lower-than-expected impact from U.S. tariffs following a recent agreement between the United States and the European Union. The company, known for its Remy Martin cognac, said it now expects a net hit of 20 million euros ($23.4 million) from U.S. tariffs on its current operating profit for the 2025-2026 fiscal year. This is a significant reduction from the 35 million euros previously estimated.

The revised outlook comes after a 15% tariff rate was agreed upon last month for EU imports into the United States, easing some of the uncertainty that has weighed on European spirits makers in recent years. Remy Cointreau’s key markets in the U.S. and China have seen declining sales, leading to several downward revisions of its financial guidance and the abandonment of medium-term sales targets. However, in June, the company indicated that it believed the worst of these challenges had passed.

Despite the improved outlook for U.S. tariffs, Remy Cointreau maintained its estimate of a 10 million euro impact from Chinese tariffs. The overall expected blow from global tariffs now stands at 30 million euros, down from an earlier estimate of 45 million euros. As a result, Remy Cointreau now anticipates a mid-single-digit percentage organic decline in current operating profit for the 2025-2026 fiscal year, compared to the mid-to high-single-digit drop previously forecasted.

For the 2024-2025 fiscal year, Remy Cointreau reported a current operating profit of 217 million euros, representing a 30.5% decline on an organic basis due to continued weakness in both U.S. and Chinese markets. The company generates about 70% of its sales from cognac, with most of that coming from these two countries, making it more vulnerable to trade disputes and economic slowdowns than more diversified competitors.

Brokerage firm Jefferies noted that this marks the second time Remy Cointreau has upgraded its profit outlook as tariff concerns have eased. Jefferies also suggested that further optimism could emerge once the EU-U.S. trade deal is finalized and said that reduced tariff costs would give Remy Cointreau more room to invest in initiatives aimed at regaining market share in both the U.S. and China.

Despite Thursday’s strong performance, Remy Cointreau shares were down 1.6% at 53.8 euros as of early Friday trading in Paris. The company’s main rival, Pernod Ricard, also revised its forecast for the annualized impact of U.S. and Chinese tariffs on Thursday, lowering its estimate to 80 million euros from 200 million previously.

The recent developments reflect ongoing adjustments by major European spirits companies as they navigate shifting trade policies and changing consumer demand in their largest markets.