Rémy Cointreau's Sales Slump: A Storm in a Brandy Glass?

The numbers are in, and they’re ugly: Rémy Cointreau’s organic sales plunged 18% to €984.6 million for fiscal 2024-25. But here’s the twist—this isn’t a death knell for the luxury spirits giant. It’s a temporary storm in a very expensive glass. Let’s break down why investors shouldn’t panic and why this might be a buying opportunity for the bold.

First, the pain points: China’s duty-free channels collapsed post-December 2024, tariffs loomed, and the calendar effect of Chinese New Year hit sales timing. Add in distributor destocking in the Americas and EMEA, and you’ve got a perfect storm. The Cognac division, which accounts for two-thirds of sales, cratered 21.9% organically, with Rémy Martin’s star product, VSOP, down 32.8% in Q4. Ouch.

But here’s where the story gets interesting. While Cognac suffered, the Liqueurs & Spirits division surged 16.1% organically in Q4, driven by U.S. demand for Cointreau, St Rémy, and The Botanist. Even in China, Cointreau and Japanese brand Telmont grew. Meanwhile, Rémy Martin held its market share, and U.S. volume depletions rebounded in Q4—a sign distributors are stabilizing inventories.

The real hero here isn’t just sales—it’s cost discipline. Rémy Cointreau slashed over €50 million in costs, shielding its Current Operating Margin (COP) target of 21-22%. Despite a 27.8% organic drop in COP to €304.4 million, management insists its long-term goals—33% COP by 2029-30 and high-single-digit sales growth—are intact.

Now, the risks: China’s 38.1% provisional tariffs on cognac imports (effective October 2024) could squeeze margins further. The U.S. is also imposing retaliatory tariffs on EU/UK imports, though a 90-day suspension buys time. But remember—tariffs are a double-edged sword. If Rémy Cointreau pivots to direct-to-consumer channels—like its booming e-commerce in China (up 10% via T-Mall and JD.com)—it can bypass traditional distributors and tariffs.

The key takeaway? This is a transition year. The company expects destocking in the Americas to end soon, and 2025-26 should mark a recovery. The Q4 U.S. rebound is a critical data point: it shows demand is still there when inventories stabilize. Meanwhile, Rémy’s focus on premiumization—think ultra-luxury products like Louis XIII—means it’s targeting the 1% who aren’t as sensitive to economic swings.

The numbers back this up. Despite the sales slump, Rémy Cointreau’s gross margin held at 71.2%, thanks to brand-mix optimization. And its 2029-30 targets—72% gross margin and 33% COP—are ambitious but achievable if it sticks to its strategy.

So, is this a buy? For long-term investors, absolutely. The short-term pain is pricing in a lot of fear, and the stock’s dip could be a gift. The company’s resilience in key markets, cost cuts, and focus on direct sales are all bullish signals. The 18% sales drop is a speed bump, not a roadblock.

Conclusion: Rémy Cointreau is not in freefall. It’s adjusting to a new normal—tariffs, shifting consumption, and inventory cycles. But its premium brands, cost controls, and e-commerce push give it a fighting chance. If you can stomach near-term volatility, this could be a once-in-a-decade entry point for a luxury giant with a 33% margin target and a portfolio that includes some of the world’s most iconic spirits. The question isn’t whether Rémy can survive this slump—it’s whether you’re ready to bet on its comeback.

Final Take:
- Hold for: Investors with a 3-5 year horizon.
- Avoid if: You’re scared of tariffs or need quick returns.
- Key Stat: Liqueurs & Spirits grew 16% in Q4—proof Rémy’s not one-trick pony.

This isn’t just about brandy. It’s about resilience. And right now, Rémy’s got a lot of that.