Remy Cointreau: The Cycle Has Bottomed, More Upside Ahead

The premium spirits sector, long a bastion of discretionary spending, has endured a turbulent post-pandemic cycle. For Rémy Cointreau, the past two years have been a crucible of inventory resets, macroeconomic headwinds, and shifting consumer preferences. Yet, beneath the surface of declining sales and operating profits lies a compelling narrative of strategic recalibration and emerging opportunities. The question now is whether the trough has been reached—and if so, what the path to recovery entails.

A Cycle of Adjustment

Rémy Cointreau’s 2023-24 and 2024-25 fiscal years were marked by sharp declines in organic sales (-19.2% and -18.0%, respectively) and operating profits (-27.8% and -30.5%) [1]. These figures reflect a sector-wide recalibration, particularly in the Americas, where U.S. distributors slashed inventory levels to align with softer demand [2]. The Cognac division, a cornerstone of the company’s portfolio, faced a 32.4% operating profit decline, driven by margin erosion and rising production costs [3]. Meanwhile, the Liqueurs & Spirits division, though more resilient, saw a 10.5% drop in profitability, underscoring the fragility of premium non-Cognac categories in a downturn [4].

However, the first quarter of 2025-26 signals a turning point. Organic sales surged 5.7% to €220.8 million, outpacing the broader sector’s contraction [5]. The Liqueurs & Spirits division led this rebound, with a 17.3% organic growth driven by U.S. demand for Cointreau and The Botanist [6]. This divergence from the sector’s struggles suggests that Rémy Cointreau’s cost-cutting measures—€145 million in savings in 2023-24 and €85 million in 2024-25 [1]—have preserved pricing power and operational flexibility.

Strategic Rebalancing and Market Realities

Rémy Cointreau’s response to the downturn has been twofold: aggressive cost optimization and strategic reallocation of resources. The company’s “Sustainable Exception” roadmap, which emphasizes environmental and social governance, has not only reduced costs but also reinforced brand equity in markets like China and Travel Retail [5]. Simultaneously, the firm has pivoted away from stagnant markets (e.g., China’s inaccessibility to duty-free sales) toward high-growth areas, such as its minority stake in JNPR, a non-alcoholic spirits pioneer [6]. This move aligns with a broader industry trend: the rise of low-and-no alcohol categories, which are reshaping premium spirits consumption [7].

Yet, challenges persist. Analysts caution that U.S. tariffs on European spirits, now projected to rise to 30% from 20%, could add €10-35 million in costs [8]. Moreover, the Cognac division’s modest 1.3% Q1 growth [5] highlights the sector’s structural vulnerabilities, including over-reliance on cyclical markets and the inelasticity of aged stock.

Valuation Opportunities and Sector Trends

The premium spirits sector is now at an inflection point. As consumers seek authenticity and emotional connection, brands that blend heritage with innovation—such as Rémy Cointreau’s satirical “Any Tequila” campaign—stand to gain market share [9]. Meanwhile, the rise of non-Mexican agave spirits and high-proof clear spirits suggests a diversification of premium preferences, reducing reliance on traditional categories [10].

Rémy Cointreau’s financial metrics further support a cautious optimism. Over recent years, its EBITDA margin has averaged 27.3% (ranging from 24.47% to 30.19%), while net margins have hovered between 11.01% and 18.97% [11]. These figures, though compressed in 2024-25, remain robust relative to peers. The company’s revised full-year guidance—a mid-to-high-single-digit decline in organic COP—reflects confidence in its ability to navigate tariffs and currency fluctuations [12].

Conclusion: A Path to Recovery

Rémy Cointreau’s journey through the downturn has tested its resilience but also sharpened its strategic focus. The Q1 2025-26 rebound, coupled with its pivot to non-alcoholic and high-growth markets, suggests that the cycle has indeed bottomed. For investors, the key question is whether the company can sustain this momentum amid ongoing macroeconomic pressures. The answer lies in its ability to balance cost discipline with innovation—a test it has passed thus far.

As the premium spirits sector evolves, Rémy Cointreau’s blend of heritage, agility, and foresight positions it to reclaim lost ground—and perhaps even outperform. The trough may be behind it, but the climb ahead will require both grit and vision.

Source:
[1] Rémy Cointreau: 2023-24 Annual Results [https://news.remy-cointreau.com/?p=17142]
[2] Rémy Cointreau: 2024-25 Annual Results [https://news.remy-cointreau.com/?p=24378]
[3] Rémy Cointreau: 2024-25 Annual Results - Yahoo Finance [https://finance.yahoo.com/news/r-cointreau-2024-25-annual-053000395.html]
[4] Rémy Cointreau: 2023-24 Annual Results [https://www.nasdaq.com/press-release/remy-cointreau-2023-24-annual-results-2024-06-06]
[5] First quarter 2025-26 Sales [https://news.remy-cointreau.com/?p=25184]
[6] Rémy Cointreau's Q1 Outperformance: A Strategic Masterclass in the Premium Spirits Sector [https://www.ainvest.com/news/cointreau-q1-outperformance-strategic-masterclass-premium-spirits-sector-2507/]
[7] Spirits trends to watch in 2025 [https://www.thespiritsbusiness.com/2025/01/spirits-trend-predictions-for-2025/]
[8] Remy Cointreau Q1 Sales Jump 5.7%, Profit Forecast [https://stockinvest.us/digest/remy-cointreau-q1-sales-jump-57-profit-forecast-upgraded-despite-rising-us-tariffs]
[9] Remy Cointreau SA (REMYY) Q1 25/26 TU earnings call transcript [https://finance.yahoo.com/quote/REMYY/earnings/REMYY-Q1-2026-earnings_call-353658.html]
[10] Five Key Trends Shifting the Beverage Alcohol Market in 2025 [https://www.theiwsr.com/insight/five-key-trends-shifting-the-beverage-alcohol-market-in-2025/]
[11] Rémy Cointreau SA: Financial Data Forecasts Estimates [https://www.marketscreener.com/quote/stock/REMY-COINTREAU-SA-119083628/finances/]
[12] Rémy Cointreau Faces Challenging Q1 in 2025–26 [https://wine-intelligence.com/blogs/wine-news-insights-wine-intelligence-trends-data-reports/remy-cointreau-faces-challenging-q1-in-2025-26-cognac-brandy?srsltid=AfmBOopE62fkHSpiLmSlK0Ko7pzMcKc_F6JkkE5QujHSeO4Y3cFa4T8W]