Rémy Cointreau reported a significant decline in annual earnings for the 2025-26 financial year, with U.S. import tariffs and higher production costs weighing on profitability. Despite the pressure on margins, the French spirits group delivered operating results and earnings per share that exceeded market expectations and reaffirmed its expectation of returning to organic sales growth in the current year.
Net profit attributable to shareholders fell 35.1% to €78.7 million, below the analyst consensus forecast of €82.4 million compiled from 16 analysts. However, adjusted net income reached €89.2 million, outperforming both the consensus estimate of €83.8 million and Jefferies’ projection of €84.4 million.
Group revenue totalled €935.3 million. While reported sales declined 5% from the previous year, organic growth was marginally positive at 0.2%, matching analyst expectations. The company said exchange-rate movements, particularly involving the U.S. dollar and Chinese renminbi, reduced reported sales by 5.2 percentage points.
Current operating profit decreased 23.8% to €165.4 million. Even so, the result exceeded both the consensus estimate of €163 million and Jefferies’ forecast of €164.8 million. On an organic basis, operating profit declined 11.5%, outperforming expectations for a larger drop. Current operating margin stood at 17.7%, slightly ahead of market forecasts of 17.4%.
Adjusted earnings per share came in at €1.71, ahead of the consensus forecast of €1.62 and Jefferies’ estimate of €1.64. According to the company, the earnings decline “mainly reflects a decline in gross margin linked to incremental customs duties, as well as unfavorable trends in price mix and production costs.” Gross margin contracted by 3.7 percentage points on an organic basis to 65.8%.
Within the Cognac division, operating profit fell 12.6% organically to €141.5 million, while margin narrowed by 3.6 percentage points to 24.7%. The decline reflected a less favourable sales mix, higher operating costs and the impact of customs duties.
Meanwhile, operating profit in the Liqueurs and Spirits segment slipped 3.1% organically to €43.1 million, falling short of Jefferies’ estimate of €51.2 million.
Cash generation improved during the year, with free cash flow increasing to €53.8 million. The group’s cash conversion rate rose to 27%, compared with 10% in the previous financial year. Net debt to EBITDA increased to 3.22 times from 2.40 times, although this remained better than the market consensus of 3.29 times.
Looking ahead to 2026-27, management expects a return to organic revenue growth, with momentum anticipated to strengthen “progressively through the year.” The company also forecasts a modest improvement in current operating margin and aims to keep net debt below 3.5 times EBITDA by March 2027.
The outlook incorporates an estimated €20 million impact from customs duties, compared with roughly €15 million in 2025-26. Currency movements are also expected to reduce sales by between €15 million and €20 million and lower operating profit by €5 million to €8 million.
Analysts at Jefferies noted that the market’s current operating profit forecast of €167.9 million for 2026-27 “could drift towards” their estimate of €160.3 million, “largely on FX.” They added that management’s guidance points to “low-single-digit to mid-single-digit” organic growth, compared with the market’s current expectation of 5.4% growth in operating profit.
Rémy Cointreau also unveiled its new “RC Forward” transformation programme, which aims to generate €100 million of additional value at the operating profit level by 2028-29 compared with 2025-26. Jefferies said this represents an implied increase of around 60%, although the broker noted that “it is unclear to what extent this will be reinvested behind growth initiatives.” The firm reiterated its “buy” recommendation and maintained a €48 price target.
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