French spirits maker Remy Cointreau has today posted a slightly smaller-than-expected decline in third quarter sales, helped by a sequential improvement in the US and major destocking in China ahead of the Chinese New Year.
However, the maker of Remy Martin cognac and Cointreau liquor said its annual sales decline would likely be at the lower end of its earlier outlook range of 15% to 20% in the year to March.
Remy was forced to cut its full-year guidance in October amid falling US sales following a post-Covid boom, while sales growth in China lagged expectations amid a tough economy.
It reiterated today that it did not expect sales to return to growth in the US before financial year 2024/25, and that sales growth would be tempered by a slower than expected economic recovery in post-pandemic China.
The US and China are the group's two key markets for cognac.
The company said its sales dropped by 23.5% on an organic basis to €319.9m in the third quarter, which covers the important Christmas season, ahead of analysts' expectations of €318.6m in a company-compiled consensus.
Its Europe, Middle East and Africa (EMEA) region saw a sharp decline in the quarter due to a combined impact of unfavourable phasing and inflation curbing consumption. Remy said annual sales growth in the region would also be moderated by the persistently high inflation.
Sales of cognac, which makes up a large portion of Remy's revenue, were down 33.9% in the quarter at €197.1m compared to the €194m expected by analysts.
Remy's Liqueurs & Spirits division reported quarterly organic growth of 4.3%, driven by good momentum and positive phasing effect in the US.
