Rémy Cointreau posts stronger than expected sales growth and raises profit outlook amid global market challenges

Rémy Cointreau has reported its first quarter of sales growth since early 2023, surpassing analyst forecasts and raising its profit outlook for the year. The French company, known for its Cognac and liqueurs, posted a 5.7% increase in organic sales for the three months ending in June. This result was well above the 2.3% growth expected by analysts and marks a notable contrast to Moët Hennessy, which continued to see declining sales during the same period.

The company’s performance comes amid ongoing challenges in the global spirits market, including high inflation in the United States and uncertainty over tariffs. Despite these headwinds, Rémy Cointreau’s management expressed confidence in its ability to weather the storm. The group raised its full-year profit guidance, now expecting operating profit to decline by mid- to high-single digits, an improvement from the previously forecasted mid- to high-teen drop.

Cognac sales rose by 3.1% compared to last year but remain 16% below the levels seen in the same quarter of 2020, before the pandemic disrupted global markets. The company’s liqueurs and spirits segment, which includes the flagship Cointreau brand, performed strongly with a 13% increase over last year and nearly 60% growth compared to pre-pandemic figures. Rémy Cointreau attributed much of this gain to a low base of comparison in the United States from a year ago.

Sales in the Americas were particularly strong, rising by double digits. In China, however, sales continued to decline, though Rémy Cointreau described the drop as “limited.” The company remains hopeful that consumer sentiment in China will gradually improve following Beijing’s agreement on a minimum price selling plan with major Cognac producers.

Tariffs remain a significant concern for Rémy Cointreau. The company now expects tariffs to impact it by €45 million this year, down from an earlier estimate of €65 million. This reduction is mainly due to a decrease in anticipated Chinese duties from €40 million to €10 million. However, the expected impact from U.S. tariffs on European goods has increased by €10 million to €35 million. This adjustment is based on expectations that former President Trump will impose tariffs at a rate of 30%. LVMH, another major player in the industry, suggested yesterday that tariffs could be as low as 15% if trade negotiations between Washington and Brussels progress before an August 1 deadline.

Despite these challenges, Rémy Cointreau’s results show resilience in a difficult market environment. The company’s ability to outperform expectations and improve its profit outlook stands out at a time when many competitors are struggling with declining sales and ongoing economic uncertainty.