PARIS/LONDON (Reuters) -Remy Cointreau on Wednesday abandoned its 2030 sales growth ambitions, saying tariffs and persistently slow U.S. sales could derail its plans for this financial year and beyond.
However, shares in the maker of Remy Martin cognac and Cointreau liqueur, which has been grappling with tariffs and sliding sales in its key U.S. and Chinese markets, rose almost 6% after executives said the worst had passed in terms of sales and profit declines.
"We believe this difficult phase is now behind us," outgoing CEO Eric Vallat told investors during his final results presentation, while adding that Remy's 2030 goal for high-single-digit percentage growth in sales appeared no longer achievable.
Uncertainty, tariffs and a lack of U.S. sales recovery meant there was no longer the "necessary conditions to guarantee it", he said.
Incoming CEO, luxury goods veteran Franck Marilly, would establish his own strategic roadmap, Vallat added.
Remy joins peers Diageo and Pernod Ricard in withdrawing sales targets that had become widely seen as overly ambitious as the entire sector endures a sharp slowdown from previous boom years for pricey liquors.
But Remy, which makes 70% of its sales from cognac, mostly in the U.S. and China, has suffered more than peers as drinkers in both nations ditch the brandy and both governments have levied tariffs.
Remy said the confirmation of provisional steep tariffs imposed by China on EU brandy, U.S. tariffs of 20% on EU imports and 10% rates for the United Kingdom and Barbados would - if confirmed - deal a 65 million euro ($74 million) blow to operating profit after mitigation measures.
Barclays analyst Laurence Whyatt said greater clarity on the tariffs' impact allowed investors to adjust their expectations, helping Remy stock higher.
"Any improvement on tariffs is upside," he continued, adding Remy had also taken welcome steps to streamline its business.
Vallat and finance chief Luca Marotta told investors that Remy had reduced its headcount by 9% versus 2022/2023 and would cut the volume of its eau de vie purchases - the unaged brandy used to make its cognac - by up to 45%.
Elevated inventories in the United States, meanwhile, had been reduced by around 60 million euros to a value lower than levels seen in 1920, Vallat said.
Sales would return to mid-single-digit growth this financial year even without a hoped-for uptick in cognac purchases by U.S. consumers, in large part thanks to an easier base of comparison versus steep declines in 2024/25, Remy said.
Group operating profit for the year ended March 2025 fell 30.5%, just beating expectations.
($1 = 0.8794 euros)
(Reporting by Dominique Vidalon. Editing by Sudip Kar-Gupta and Mark Potter)
By Dominique Vidalon and Emma Rumney
