PARIS (Reuters) – Rémy Cointreau reported organic decline in 19% on Wednesday in the fourth quarter of its offbeat exercise, a more marked decline than expected due to the sharp drop in the Cognac division which however returned to growth in the United States.

Analysts were tabling on a drop of 17.9% to 197 million euros, according to a consensus compiled by the company.

Rémy Cointreau, whose director general Eric Vallat said he would leave the company this summer, is faced with the weakness of demand and the threat of customs duties in its key markets that are the United States and China.

Sales of the Cognac division, which represents most of the turnover (70%), dropped by 32.8%during the quarter, while analysts expected a drop of 29.9%.

In China, sales have been “penalized by a significantly high comparison base, the non-accessibility of the Chinese duty free since December and to a lesser extent a negative calendar effect” linked to the Chinese New Year, the group said in a press release.

Conversely, the United States “has returned to strong growth, carried by a very favorable comparison base and the continuation of the sequential improvement of ‘depletions’ in volume”.

Over the entire financial year 2024-2025, the turnover of the cognac producer fell 18% in organic data to 978.8 million euros, in accordance with expectations.

The group of spirits had lowered its forecast for annual turnover at the end of January targeting an organic decline “close” by 18% (against 15% to 18% previously).

The group has therefore confirmed its 2024-2025 objective of a common operating margin between 21% and 22%, by organic, citing the “pursuit of a strict control of its costs” and the implementation of a cost reduction plan of more than 50 million euros.

(Written by Kate Entringer, edited by Augustin Turpin)

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