Remy Cointreau's New CEO Pledges Growth After Cost Cuts Soften Profit Drop
The new CEO of Remy Cointreau, Franck Marilly, has outlined a plan to revive the spirits maker's performance, promising a return to growth in the second half of the year. This comes after the company's first-half operating profit fell 13.6%, less steep than the anticipated 18.1% decline. The shares rose 6% in early trade, but the company's stock has been on a downward trend due to downturns in major markets and repeated cuts to sales forecasts.
Marilly's first results statement since taking over in June marked the "start of a new era", despite challenging first six months. He outlined five levers to boost performance, including reorganising operations, reallocating commercial resources, and focusing investment on top priorities. He also pledged to improve price agility while staying true to the company's value-driven strategy.
The company makes around 70% of its sales from cognac, mostly in the United States and China, where consumer sentiment and finances have been persistently weak. This has led to a decline in sales, with Remy Cointreau suffering more than its rivals. The company has also faced challenges due to tariffs on cognac imports in China and on EU goods entering the United States.
Analysts are keeping a close eye on Marilly's strategic direction, with one stating that investors need proof that earnings have hit their lows and that current challenges are temporary. The company's future performance will be crucial in determining whether Marilly's plan to return to growth is successful.
