Improvement in the United States and Major Destocking in China Ahead of Chinese New Year
French spirits maker Remy Cointreau announced on Friday that its third-quarter sales decline was slightly smaller than expected. The company attributed this to a sequential improvement in the United States and significant destocking in China ahead of the Chinese New Year.
In October, Remy Cointreau had to revise its full-year guidance due to declining sales in the United States following a post-COVID boom. Additionally, sales growth in China fell short of expectations due to the challenging economic conditions.
The company reaffirmed that it does not anticipate sales to return to growth in the United States before the financial year 2024/25. Furthermore, sales growth in post-pandemic China is expected to be slower than initially projected.
The United States and China are Remy Cointreau’s two primary markets for cognac. While the company maintains its forecasts for the year ending in March, it anticipates the sales decline to be at the lower end of the 15% to 20% range announced in October.
Remy Cointreau’s overall sales dropped by 23.5% on an organic basis to 319.9 million euros ($346.7 million) in the third quarter. This exceeded analysts’ expectations of 318.6 million euros according to a company-compiled consensus.
Sales of cognac, which account for a significant portion of Remy Cointreau’s revenue, declined by 33.9% in the quarter, totaling 197.1 million euros. Analysts had anticipated sales of 194.0 million euros.
Remy Cointreau’s Liqueurs & Spirits division reported a quarterly organic growth of 4.3%, driven by positive momentum and a favorable phasing effect in the United States.