The group was hit by mass on-trade closures around the world and the slump in global air traffic. Sales decreased 32.8% on a reported basis and 33.2% on an organic basis to €150.1 million in Q1.
Cognac sales from the House of Rémy Martin declined 39.2% year-on-year in the first quarter. The group said sales held up well in the United States and China, but it felt the impact of on-trade closures and a slump in duty-free sales.
The firm’s liqueurs and spirits division proved more resilient, with Q1 sales down just 17% on an organic basis. The House of Cointreau actually managed to achieve slight sales growth thanks to a huge uptick in sales in the United States, Germany and the UK, where consumption of at-home cocktails caused demand to spike.
Mount Gay, Metaxa, St-Rémy, The Botanist and the firm’s whisky brands all declined, mainly due to the drop in duty-free sales. Partner brands were also down 21.1% on an organic basis, as they are heavily exposed to Western Europe.
Rémy Cointreau anticipates Q2 declines to be even steeper, and it now expects operating profit to be down 35% to 40% for the first half of the 2020/21 financial year (the six months to September 30). However, that is better than previous guidance of a 45% to 50% decline, which is a result of its better than expected Q1 performance.
The firm said it expects to see a strong recovery in the second half of the financial year, driven by the United States and Mainland China.
