PARIS (Reuters) – Rémy Cointreau lowered its outlook for its 2023-2024 financial year on Friday due to the deterioration of market conditions, particularly in the United States, which weighed on its turnover in the second quarter.

The spirits group now expects a decline in organic turnover of between 15% and 20%, compared to a previously forecast of stable revenues.

He is also aiming for a “controlled” decline in the current operating margin in organic data, whereas he previously saw it stable.

In the United States, market conditions have deteriorated with the persistence of a highly promotional environment and the rise in interest rates which impacts the financing capacities of distributors, explains Rémy Cointreau.

As a result, the resumption of sales growth, which was initially expected in the third quarter, is now expected for the full financial year.

In China, sales growth will be lower than expected given the country’s difficult economic recovery from the COVID-19 pandemic.

The EMEA region should experience moderate annual growth in a persistent inflationary context, adds Rémy Cointreau.

In the second quarter, the group recorded a 10.8% decline in its turnover on an organic basis, bringing the decline over the entire first half to 22.2%.

“The year 2023-24 marks for the group as a year which will allow it to clean up the level of its cognac stocks in the United States and absorb the effects of post-Covid normalization in order to approach the year 2024-25 in the best conditions and resume the trajectory it has set for 2029-30″, indicated Rémy Cointreau in a press release.

The group has thus confirmed its financial objectives for this horizon with an expected current operating margin of 33%.

(Written by Blandine Hénault)

Copyright © 2023 Thomson Reuters