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Investing.com -- Remy Cointreau (EPA:RCOP) reported weaker-than-expected fourth-quarter sales on Wednesday but noted a "steep recovery" in the U.S. market, which had been a major drag on performance over the past year.
Remy said its cognac sales “rebounded sharply” in the U.S., helped by a “very favourable” comparison base. The rebound follows a prolonged slump caused by elevated inflation and interest rates. Back in January, the company had identified the fourth quarter as the earliest window for a potential turnaround in the U.S.
Remy noted that an action plan for its most affordable Remy Martin cognac—its top-seller in the U.S.—was beginning to deliver results.
The company’s shares jumped nearly 4% in Paris trading.
"The shares are already discounting a lot of bad news, however, tariffs and macro uncertainty are an overhang," Jefferies analysts commented.
While the performance in the U.S. marked a positive development, it stood in contrast to a broader decline across the business.
Group sales fell 19% in the quarter, worse than the 17.9% drop expected by analysts in a company-compiled consensus. Cognac, which makes up about 70% of the group’s revenue, also underperformed.
Sales in China weakened as well, with Remy attributing the decline to difficult market conditions. The company is also facing steep Chinese tariffs amid escalating trade tensions between Beijing and Brussels, which have led to a halt in duty-free cognac sales in China. In the U.S., meanwhile, tariffs affecting Remy’s cognac remain suspended.
Despite the short-term setbacks, the group reiterated its full-year and long-term guidance through 2029-30. It continues to target a return to high single-digit sales growth beginning with the next financial year.