Remy Cointreau, the renowned French distiller, faced a challenging first half of fiscal 2024 with a decrease in sales and earnings. The company attributed this decline to high inventories and rising interest rates in the U.S. market.
According to the company’s financial report, the current operating profit for the six months ending on September 30 was €169.1 million ($185.5 million), representing a 43% organic year-on-year decrease. The reduction in sales was partially offset by a decrease in overhead costs.
During this period, the operating margin decreased from 37% to 27% compared to the previous year. Net profit also saw a significant decline, dropping by 44% to €113 million.
In terms of sales performance, there was an organic decline of 22% in the first half, amounting to €636.7 million. Cognac sales specifically experienced a 30% decrease on an organic basis. However, sales in the Liqueurs & Spirits division remained steady.
To counter the short-term effects of these challenges, Remy Cointreau implemented several cost-cutting measures.
Despite the difficult first half, the company confirmed its recently-downgraded sales guidance for fiscal 2024. It anticipates a further decline of 15% to 20% on an organic basis.
Looking to the future, Remy Cointreau maintains confidence in achieving its targets for 2029-2030. These targets include a gross margin of 72% and a current operating margin of 33%.
