French spirits maker Remy Cointreau has today raised its annual profit forecast, joining larger rival Pernod Ricard - which owns Irish Distillers - in flagging a lower than feared blow from US tariffs after a 15% rate was agreed on EU imports last month.
Sales have slumped in Remy Cointreau's key US and Chinese markets in recent years, forcing the company into multiple guidance downgrades and to scrap medium-term sales targets. It said in June, though, that the worst was over.
Remy said on Friday it now expects a net €20m hit from US tariffs on its current operating profit for the 2025-2026 fiscal year, down from €35m estimated previously.
An estimated hit from Chinese tariffs of €10m was unchanged and Remy now expects an overall blow from global tariffs of €30m, down from 45 million estimated previously.
As a result, the maker of Remy Martin cognac now expects a mid-single-digit percentage organic decline in 2025-2026 current operating profit, an improvement from the mid-to high-single-digit percentage drop previously anticipated.
In 2024-25, Remy reported a current operating profit of €217m, down 30.5% on an organic basis amid weak US and Chinese sales.
The new forecast "represents a second upgrade from the company as tariff uncertainty has eased", brokerage Jefferies said in a note, expecting more optimism once the EU-US trade deal is finalised.
Jefferies said the lower tariff hit would allow Remy to invest in growth initiatives to regain market in the US and China.
Remy shares were down 1.6% this morning, after rising strongly yesterday.
The company makes around 70% of its sales from cognac, mostly in the US and China, leaving it more exposed to tariffs and economic downturns than more diversified rivals.
Pernod Ricard yesterday revised its forecast for the annualised impact of U.S. and Chinese tariffs to €80m from €200m previously.
Reporting by Reuters
