Despite “very strong” performances elsewhere, Rémy Cointreau Q1 sales saw a significant slide as Cognac fell out of favour in the US.
Total sales plummeted 35% to €257.5 million on an organic basis, linked to an exceptionally high comparison base.
Rèmy Cointreau said the declines were expected and confirmed its full-year guidance. It expects to see a “strong” second-half recovery driven by a “sharp rebound in the US”.
Despite weakness in the US and Cognac’s underperformance, the Asia and EMEA regions both posted double digit sales gains.
According to Rèmy Cointreau, the travel retail recovery across Asia soared by 30% above a Q1 2019-2020 baseline.
It says it expects the Cognac category to return to pre-pandemic levels in travel retail later this year.
Looking forward, the business said expected currency rates to cause a sales drop of between €50m and €60m over the financial year.
Rémy Cointreau Q1 sales by category
Cognac suffered destocking across the US and saw organic sales globally slide 44.7%. Despite this, China saw “very strong growth” for the category.
Across the rest of Asia, Cognac recorded “double digit” growth, thanks to Louis XIII and VSOP. Cognac in EMEA also saw positive gains.
The Liqueurs & Spirits division fared slightly better overall, with 11.4% declines, again from an exceptionally high comparison base.
In his quarterly presentation document, Rémy Cointreau CFO Luca Marotta confirmed that “underlying trends remain healthy”.
The Cointreau brand however saw “very good momentum. The liqueur recently launched its Margarita Right campaign featuring Aubrey Plaza. It is expected that the brand will see a return to growth in Q2.
The third-party division Partner Brands saw sales slip by 4.6% on an organic basis.
Rémy Cointreau celebrated a record performance in its 2022-23 financial year. Sales climbed 10.1% on an organic basis to hit €1,548.5 million, with travel retail a “strong” contributor.