Morning Note: Market News and Remy Cointreau
Market News
US Markets were little changed again on Wednesday with the S&P 500 closing 5970.81 +0.44 (+0.1%). The was despite a much weaker than expected ADP Employment report which indicated that the US created only 37k jobs in May versus market expectations of 114k. Eyes now turn to the non-farm payrolls report due out tomorrow.
Japanese Government Bonds (JGBs) rose after an auction of 30-year debt, where it had the weakest demand in almost two years, wasn’t as bad as many investors had feared.
Oil declined after Saudi Arabia was said to want OPEC+ to continue with production hikes in the coming months. US and European futures edged lower.
The ECB will almost certainly cut rates by 25 bps today, with a baseline scenario for another same-sized reduction in September, Bloomberg Intelligence said. Christine Lagarde is expected to unveil new forecasts for consumer prices.
Donald Trump clamped down further on immigration and banned individuals from 12 countries including Iran and Afghanistan from entering the US. He also barred foreign students from entering to study at Harvard. He also mentioned in a separate post that Vladimir Putin had warned that he would retaliate for a recent Ukrainian drone strike on Russian airfields. Separately, Scott Bessent said that Russian allies won’t profit from Ukraine rebuilding resources.
Corporate: Kimberly-Clark is close to a $3.5 billion sale of its global tissue business outside of North America, the WSJ said. Nvidia director Mark Stevens disclosed a proposal to sell $550 million worth of shares. Lex Greensill is set to testify in a London court case brought by a Credit Suisse fund against SoftBank, the FT reported.
Rémy Cointreau: 2024–25 Full Year Results
Rémy Cointreau reported full-year sales of €984.6 million, representing a 17.5% decline on a reported basis and an 18.0% drop organically. The sharp contraction was driven by continued destocking pressures in the United States, the group’s largest market, and sluggish consumer demand in China. Both regions saw softer volumes and reduced consumption of premium spirits, particularly in the Cognac segment.
By division, House of Rémy Martin (which includes the Cognac business) posted a 23.7% organic decline in sales, reflecting a volume-led slowdown, especially in the US, where distributors reduced inventory levels sharply. Liqueurs & Spirits fell 4.9% organically, more resilient due to stronger performance in Europe and Japan. The Partner Brands division, which is less material in group terms, saw sales fall 11.6% organically.
Gross margin narrowed slightly but remained historically high, supported by a favourable product mix and disciplined pricing strategy. However, Current Operating Profit (COP) fell 30.5% organically to €217 million, with the operating margin down 3.9 percentage points to 22.0%, reflecting negative operating leverage from lower volumes. Analysts had anticipated an even steeper decline, so margins were considered resilient in the context.
Net profit attributable to the Group declined 34.4% to €121.2 million, reflecting the fall in operating profit and some adverse currency effects. Earnings per share fell proportionally, while net margin slipped to 12.3%, from 15.9% the year before. The board proposed a dividend of €2.00 per share, unchanged year-on-year, signalling confidence in the long-term business fundamentals.
To protect profitability, Rémy Cointreau launched an aggressive cost-reduction programme during the year, initially targeting €50 million in savings. The initiative ultimately delivered €85 million in total cost savings, through SG&A reductions, supply chain optimisations, and marketing efficiencies, helping mitigate the profit drop.
Despite reiterating its long-term ambition to lead the ultra-premium spirits category, the Group withdrew its 2030 revenue guidance, citing uncertainty over macroeconomic conditions, currency volatility, and trade-related risks such as tariffs. In particular, the company warned of ongoing challenges in the US market and weaker-than-expected recovery in China.
Looking forward, Rémy Cointreau forecasts a return to mid-single-digit organic sales growth in FY 2025–26, underpinned by normalisation of inventory levels in the US and a gradual recovery in global demand for high-end spirits. Operating margin is expected to stabilise or slightly improve, supported by the full-year impact of cost savings and a continued focus on value over volume.
The Group remains committed to its strategy of premiumisation and sustainability, with plans to increase investments in brand equity, digital tools, and customer experiences across its key marques including Rémy Martin, Cointreau, and Mount Gay.
