Rémy Cointreau (EU:RCO) SA has lowered its full-year 2026 guidance after reporting a steeper-than-expected decline in second-quarter sales, citing weak market conditions in both the United States and China.
The French premium spirits maker said organic sales fell 11% in the second quarter, missing the company-compiled consensus for a 9.5% decline. Analysts at Morgan Stanley noted that the “magnitude of today’s cuts is significantly larger than expectations” as Rémy Cointreau reduced both its revenue and profit forecasts.
The company now expects full-year organic sales growth to range from flat to low single digits, down from earlier guidance of mid-single-digit growth. It also projects organic EBIT to decline by low double-digit to mid-teen percentages, compared with previous expectations of a mid-single-digit drop. According to Morgan Stanley, the updated guidance “implies mid-teens% cuts to FY26 EBIT at the midpoint.”
Currency effects are expected to further pressure results, with management forecasting a €50–60 million hit to sales and a €25–30 million impact on EBIT, widening from the earlier outlook of €15–20 million. Tariff-related costs were revised down to €25 million from €30 million, including €5 million in China and €20 million in the U.S.
In the company’s core U.S. cognac segment, sales grew by a mid-teens percentage, while depletion volumes fell 3.5% over the past three months — an improvement from the 8.5% decline seen in the prior quarter. Overall inventories in the U.S. market remained stable at “close to 4M” months of supply.
In Mainland China, cognac sales dropped 25%, impacted by “stricter discipline and austerity measures impacting consumer confidence,” according to Morgan Stanley. In Europe, the Middle East, and Africa, sales fell by the mid-teens percentage, pressured by “strong competitive / promotional pressures in most markets and weak demand.”
The company’s liqueurs and spirits division recorded a 5.3% organic sales drop during the quarter, with both the U.S. and EMEA regions declining by mid-single digits — partly due to “adverse phasing after a stronger Q1.” U.S. value depletions for Cointreau and The Botanist were flat in the quarter, while EMEA value depletions showed slight growth in the first half.
For the first half of FY26, net sales totaled €490 million, down 8.3% year-on-year, while EBIT reached €117 million, representing an organic decline of 14.3%. The EBIT margin fell to 23.7%, down 390 basis points from last year. Adjusted net profit came in at €67 million, down 27.2% year-on-year.
Morgan Stanley said the lowered outlook reflects “deteriorating market conditions in China and the weaker-than-expected rebound in US sales,” adding that the foreign exchange outlook has also worsened.
Leave a Reply