Bottles of Rémy Martin Cognac on display at a local grocery store, Los Angeles, California, United States, 1 July 2020. Credit: The Image Party / Shutterstock.com

Rémy Cointreau has projected its expected decline in organic sales decline will be at “the lower end” of its guidance as the French spirits heavyweight continues to face challenges in the US and China.

In a trading update released today (29 January), the group said it expected to see organic sales decline sitting “at the lower end of the guidance range (close to 18%)”.

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It also expects organic current operating margins to range between 21% – 22%.

The move comes as the Bruichladdich brand owner saw its total organic sales fall 17.8% to €797.9m in the nine months ended December 2024. Third-quarter organic and reported sales slumped 21.5% and 20.6% respectively.

For its 2024-25 fiscal year, the Mount Gay distiller has forecast its organic sales will drop between 15% and 18% but expects its fourth-quarter performance “will be decisive”.

Rémy’s business in the Americas faced “a sharp contraction in sales” amid ongoing inventory adjustments in the US and a “high basis of comparison” with the majority of shipments for the second half of its fiscal 2023-24 taking place in the third quarter.

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The Louis XIII producer’s APAC division also saw sales decline amid “tougher market conditions in China” in the third quarter.

The 22% dip in total Cognac sales in the nine month period was driven by a “marked decline” in sales “in a complex market”, it said.

“Despite a steep rise in direct sales, overall performance was penalised by a slowdown in indirect sales reflecting caution on the part of distributors,” Rémy added. E-commerce sales “remained resilient”.

By contrast, the group’s Liqueurs & Spirits division saw a “strong” increase in sales driven by Bruichladdich in China, St Rémy in South East Asia and Cointreau in both markets. Sales in the US, however, “were down sharply”.

Rémy noted the impact of the provisional decision by China’s Ministry of Commerce last year to bring in tariffs on Cognac imports “would be marginal” on its 2024-25 fiscal year. However, it added that, if the measures were “confirmed”, an “action plan” would be launched “to mitigate the effects from 2025-26”.

For the year 2024/25 year as a whole, the company reiterated its lowered outlook issued in October, expecting “no return to growth” in the Americas before Q4 2024-25 and “sequential sales deterioration” in APAC in the back half of the year compared with the first.

Alongside the cut to its outlook, the group had implemented a €50m cost-savings plan to reduce costs, amid dropping sales in the Americas and APAC regions.