Remy Cointreau cuts full-year outlook as China cognac sales continue to slide

French spirits maker Remy Cointreau again pushed back its recovery on Thursday, as it cut its 2025/26 sales and profit goals, citing deteriorating market conditions in its key Chinese market and a weaker-than-expected rebound in sales in the U.S.

This came after the maker of Remy Martin cognac and Cointreau liqueur reported a worse-than-expected 11 percent decline in second-quarter sales, reflecting tougher market conditions in China, and a later-than-usual timing of China's Mid-Autumn Festival.

Sales have slumped in Remy Cointreau's key U.S. and Chinese markets in recent years, forcing the company into multiple guidance downgrades and to scrap medium-term sales targets. The company had said in June, though, that the worst was over.

The entire spirits sector has suffered as a sales boom seen after the COVID-19 pandemic went into reverse, more recently exacerbated by tariffs on cognac imports in China and on EU goods entering the U.S.

But Remy, which makes 70 percent of its sales from cognac, mostly in the U.S. and China, has suffered more than its peers.

Sales reached 268.8 million euros (HK$2.4 billion), marking a like-for-like decline of 11 percent in July-September, worse than average analysts' expectations for a 9 percent decline in a company-compiled consensus.

Cognac division's sales fell 13.5 percent in the second quarter, reflecting mostly a sharp fall in China. In contrast, the Americas region posted a second consecutive quarter of strong growth, supported by a very favourable basis of comparisons and continued sequential improvements in depletions, the group said.

Remy said it now expects organic sales growth for the full-year 2025/2026 to range from between stable and low single digits, compared to its previous forecast for a mid-single-digit percentage organic growth.

The group also now expected an organic decline in annual current operating profit of between low double digits and mid teens, versus mid-single-digit decline previously forecast.

REUTERS