PARIS, April 26 (Reuters) – Rémy Cointreau reported on Friday a “strong sequential improvement” in its sales in the fourth quarter while the spirits group has been facing significant difficulties in China and the United States for several months. United.
Over the entire 2023-2024 financial year, the cognac producer’s turnover fell by 19.2% on an organic basis, in line with its forecast of a decline close to 20%.
Rémy Cointreau had to lower its outlook in October for its 2023-2024 financial year in the face of difficulties encountered in the United States and China, where the recovery in post-pandemic sales is sluggish.
The United States and China are the group’s two key markets for cognac, sales of which represent the majority of Rémy Cointreau’s revenues.
On Friday, the group said it had recorded a decline of only 0.7% in its turnover in the fourth quarter, after -22.7% in the third.
“After a third quarter marked by a drop in shipments in Europe and China, the group managed to normalize the level of its stocks in the fourth quarter,” Rémy Cointreau said in a press release.
In China, “in a market that remains complex”, the group benefited from favorable phasing effects and resilient underlying demand for cognac.
On the other hand, in the United States, sales remain affected by significant destocking in a context marked by inflation, a more promotional market and a strong normalization of consumption after the pandemic.
Rémy Cointreau has confirmed that it is targeting a “controlled” decline in its current operating margin for 2023-2024 on an organic basis thanks to the implementation of a cost reduction plan of around 100 million euros across the entire exercise.
The unfavorable effect of the exchange rate on annual current operating income has been revised to between seven million and 10 million euros, compared to 10 million to 15 million previously.
(Written by Blandine Hénault; edited by Zhifan Liu)
