Uncertainty over Trump tariffs leads to Remy Cointreau abandoning growth objectives
Rémy Cointreau Axes 2030 Sales Goals Amid Global Uncertainty
Faced with escalating tariffs, stagnant US sales, and an air of economic unease, spirits juggernaut Rémy Cointreau has dumped its 2030 sales growth targets. The French company, famed for its Remy Martin cognac and Cointreau liqueur, took a 30.5% hit to its annual organic operating profit, according to a recent report.
The company's predictions for the near future are as grim as they are strategic. In a 'doomsday scenario,' South China Morning Post reports Rémy could see its operating profit drop in the high teens due to hefty tariffs and sluggish sales in their prime markets, the US and China.
Rémy expressed that the economic climate has become too unpredictable to pursue its former growth objectives. New boss in the house, Franck Marilly, will cook up a new strategic plan, according to the company's statement.
Amidst the gloom, the competition shows resilience. Alcohol giants Diageo and Pernod Ricard, like Rémy, have abandoned lofty sales targets that became increasingly untenable amid the sector-wide slowdown in luxury liquor sales.
Remy's US and Chinese markets have taken the hardest hits. As consumers in both nations shun cognac and both governments slap tariffs, the spirit maker feels the pressure.
Investment analysts aren't surprised by Rémy's move, but Jefferies analyst Edward Mundy notes that the company's tariff impact estimates didn't quite line up with the market's predictions. If tariffs persist and there are no further import taxes, Rémy might be looking at a massive €65 million hit to their operating profit.
Looking on the bright side, Rémy has set its sights on organic growth in operating profit for the year ending March 2026. Sales would also rebound to mid-single-digit growth this fiscal year, largely due to an easier comparison period versus steep drops in 2024/25.
More on the Global Spirits Market:
- Previous
- 1
- 2
- Next
- Market Mayhem: How the Drinks Industry is Suffering from America's Protectionist Policies After the Gold Rush: The Aftermath of Covid-19 on the Global Economy
- Why the Rich Keep Getting Richer: The Hidden Costs Behind Wildfire-Proof Mansions
Need Help Navigating Investments?
- How to Find the Best (and Cheapest) Investing Platforms: Your Step-by-Step Guide to DIY Success
AJ Bell | AJ Bell | interactive investor | InvestEngine | Trading 212
The financial strain on Rémy Cointreau, caused by escalating tariffs and stagnant sales, has resulted in a re-evaluation of their business strategy, potentially necessitating adjustments in their investment portfolios. Amidst this delicate financial situation, it's crucial to consider the implications of taxes and governmental policies on their overall financial performance.
