Remy Cointreau targets profit growth under revival plan
Remy Cointreau's Three-Year Turnaround Strategy
By Dominique Vidalon and Emma Rumney
PARIS/LONDON, June 4 (Reuters) - Remy Cointreau on Thursday pledged to revive growth and add €100 million ($116.1 million) in operating profit by 2028/29, as CEO Franck Marilly set out a three-year turnaround plan for the struggling cognac maker.
Challenges Facing Remy Cointreau
Remy, which makes Remy Martin cognac and Cointreau liqueur, has faced a series of challenges since 2023 that have eroded sales and prompted investor selloffs.
It also reported an 11.5% drop in annual organic operating profit on Thursday - its third consecutive year of decline - although the fall was smaller than analysts had expected.
Leadership and Plan Launch
Marilly, who took the top job around a year ago, launched the plan in April but is now setting out its details for the first time.
Key Growth Initiatives
The strategy includes what the group described as “sizeable” growth initiatives, such as doubling sales in its travel retail and emerging markets divisions, and launching a new Remy Martin innovation in the United States — a key market — in the first quarter of 2027/28.
Value Creation and Market Focus
The plan will "create value across all our operations" and drive growth while reducing the company's exposure to macroeconomic cycles, Marilly said.
"Our determination remains unwavering," he continued, adding, however, Remy has limited visibility into the environment it will face in its current financial year.
Market Uncertainties
REMY TO LAY OUT GOALS IN NOVEMBER
Alongside a sector-wide downturn driven by rising living costs, Remy has also been hit by tariffs in its two largest markets, the United States and China.
The stock has tanked since 2023, losing more than 74% of its value amid years of steep sales declines, repeated cuts to sales forecasts and the scrapping of 2030 sales.
Operational Improvements and Future Outlook
Marilly's plan also aims to make Remy's distribution, advertising and promotions more effective and create a new division dedicated to emerging markets where the company has long wanted to scale up.
It said it would lay out medium-term goals supported by the plan in November.
Short-Term Financial Targets
In its current financial year, however, it targets only a slight improvement in current operating profit margin and a return to organic sales growth.
The company reported its first positive annual sales since 2023 in April, but only just at 0.2%.
Exchange Rate Information
($1 = 0.8615 euros)
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta, Mrigank Dhaniwala and Louise Heavens)
