Remy Cointreau, a French distiller, is anticipating a sales decline in fiscal 2024. This expectation is at the steeper end of its previous forecast due to challenges faced in the third-quarter sales. The company experienced intense promotional activity in the U.S. cognac market, along with a slower-than-expected economic recovery in China.
The revised projection indicates a close to 20% decline in sales for the year ending in March compared to the previous estimate of between 15% and 20%. Despite this decline, the company remains confident in its cost-cutting plan, which is expected to save approximately 100 million euros ($108.5 million) during this fiscal year. This plan is essential in maintaining a contained deterioration in profitability.
In the quarter ending in December, Remy Cointreau reported sales of EUR319.9 million. This represents a significant decrease of 27% compared to the same period last year. On an organic basis, sales fell by 24%.
Throughout the quarter, organic cognac sales experienced a 34% decline. However, there was a positive growth of 4.3% in the company's liqueurs and spirits division.
Remy Cointreau's outlook demonstrates the challenges it faces in these uncertain times, particularly within the cognac market. Nevertheless, the company remains focused on implementing cost-saving measures to mitigate any further impact on profitability.
