Cognac manufacturer Remy Cointreau boosts outlook following China-related agreement
Rémy Cointreau, the French luxury spirits company, is navigating a complex financial landscape for its 2025-2026 financial year. The company's profit and sales are being influenced by a variety of factors, both positive and negative.
Strong sales in the United States, particularly in the group's liqueurs division, are driving growth. Organic growth in the first quarter was 17.3%, with U.S. sales contributing significantly to overall growth despite challenges elsewhere.
The company's outlook has improved due to a recent trade deal between the EU and China on cognac imports. This has led to Rémy Cointreau raising its profit guidance. However, sales in Asia were still pressured by Chinese tariffs and levies.
The company anticipates a negative currency impact due to the strong euro, which has risen over 13% against the dollar. This has worsened compared to earlier forecasts: the expected negative currency impact on sales is now between 50 and 60 million euros (up from 30-35 million euros), and on adjusted operating profit between 15 and 20 million euros (up from 10-15 million euros).
Sales in Europe, the Middle East, and Africa have declined due to increased competition and sluggish demand. The company expects lower than initially anticipated price pressure effects and anticipates a return to autonomous growth in the second half of the year.
Additionally, stiffer U.S. tariffs are now expected, which might temper profit gains despite the improved outlook from the China-EU deal.
Despite these mixed factors, Rémy Cointreau remains cautiously optimistic about growth in the second half of the year. The company's shares experienced a significant increase of around four percent in Paris.
Quarterly sales in the United States rose, while they edged lower in Asia due to Chinese levies and fell in Europe, the Middle East, and Africa. The gain in sales was 5.7% when stripping out exchange rate fluctuations and other changes to the business. Sales rose by 1.8% in the April to June quarter to 220.8 billion euros.
The blue-chip CAC 40 index experienced a decrease of 0.7% during the same period. The European Union is scrambling to secure a trade deal with the United States before August 1, when Washington has threatened to hike baseline tariffs from 10 to 30%.
[1] Rémy Cointreau Q1 sales up 5.7%, beat forecasts - Reuters [2] Rémy Cointreau cuts profit outlook as euro strength hits sales - Financial Times [3] Rémy Cointreau raises China tariff impact forecast - Reuters [4] Rémy Cointreau raises US tariff impact forecast - Reuters
[1] Despite the challenging financial landscape and potentially increased US tariffs, Sébastien Müller, Rémy Cointreau's Finance Director, stated, "Our business in the United States remains robust, particularly in the liqueurs division, which has shown significant growth."
[2] The industrial sector of luxury spirits is influenced by numerous factors, including trade deals, currency exchange rates, and regional sales performances, with Rémy Cointreau's finance and profit heavily relying on such dynamics in the upcoming years.
