Remy Cointreau Q1 Sales Jump 5.7%, Profit Forecast Upgraded Despite Rising U.S. Tariffs

Remy Cointreau (EPA: RCOP) turned a corner in the first quarter of 2025, posting its first sales growth since early 2023 and upgrading its profit forecast for the year. The French spirits maker, known for Remy Martin cognac and Cointreau liqueur, saw organic sales climb 5.7% compared to a year ago, comfortably beating analyst expectations of 2.3%.

This uptick follows a bumpy patch marked by tariff tensions and weakening consumer demand, especially in the company's crucial U.S. and Chinese markets. U.S. inflation and lackluster sentiment in China were already putting the brakes on growth before tariffs kicked in. China's heavy duties on cognac imports, introduced in late 2024, hit Remy's sales hard. However, a partial easing in July trimmed the expected annual tariff burden from 40 million euros down to 10 million euros-offering some relief.

Meanwhile, the picture in the U.S. is trickier. The company now anticipates a steeper tariff hit there, expecting a 30% duty on European spirits exports instead of the previously assumed 20%. That adjustment increases the tariff cost by 10 million euros to 35 million euros, based on President Donald Trump's latest threat to impose these levies starting August 1 amid ongoing negotiations.

Overall, Remy Cointreau updated its full-year operating profit outlook, now forecasting a mid- to high-single-digit decline, an improvement over the previous projection of a mid- to high-teen percentage drop. Even with China's sales still sliding-albeit at a slower pace-growth in the U.S., helped by a low comparison base, drove the quarter's positive momentum. Cognac sales alone rose 1.3%, exceeding expectations despite falling off sharply in Europe, the Middle East, and Africa.

With about 70% of its revenue tied to cognac, the company remains vulnerable to tariff changes and economic swings in a handful of key markets. But these recent figures suggest some stabilization after a period of adjustment. Whether this momentum can sustain itself, especially if U.S. tariffs kick in as threatened, will be something to watch.