Rémy Cointreau targets a €100 million profit boost in a three-year turnaround plan

Rémy Cointreau said Thursday that it is aiming to raise operating profit by €100 million, or about $116.1 million, over the next three years as part of a turnaround plan meant to revive growth after a prolonged slowdown in cognac and broader spirits demand.

The French group, which owns Rémy Martin cognac and Cointreau liqueur, said the plan would increase operating profit by more than 60% by its 2028-29 fiscal year. Investors welcomed the target, sending the company’s shares up more than 14% in early trading, even as Rémy reported that annual organic operating profit fell 11.5% and said it would cut its dividend by half.

The strategy comes as the company tries to recover from a difficult period that began in 2023, when weaker consumer spending, inflation and trade tensions started to weigh on premium spirits sales. Rémy has been under pressure in its two biggest markets, the United States and China, where tariffs and softer demand have hurt the cognac category.

Chief Executive Franck Marilly, who took over about a year ago, first introduced the revival effort in April. On Thursday, he gave investors more detail on what the company calls its “RC Forward” plan. The goal is to reduce Rémy’s dependence on economic cycles tied to high-end cognac and to build new sources of growth across products, channels and regions.

A central part of the plan is geographic diversification. Rémy said it wants to double sales in travel retail and in emerging markets over the three-year period. The company plans to create a dedicated emerging markets division to expand in countries including India and Brazil, where spirits groups see room for long-term growth as middle-class consumption rises and premium imported brands gain visibility.

In the United States, Rémy plans to introduce a more affordable Rémy Martin expression starting in the first quarter of its 2027-28 fiscal year. The move signals a shift for a company that has long leaned heavily on higher-priced offerings. Management also said it wants to broaden distribution into channels such as convenience stores and reach consumer groups that remain underdeveloped for the brand, including Asian consumers in the United States.

The company also plans to push smaller bottle formats, expand its non-cognac portfolio and review its brand lineup more broadly. Marilly said there were “no sacred cows” in the portfolio review, suggesting that asset sales, repositioning or sharper investment choices could be part of the process as Rémy decides where future growth is most likely to come from.

The announcement reflects wider changes across the global spirits business. Producers of cognac, Scotch and other premium categories have spent much of the past two years adjusting after a pandemic-era boom gave way to slower demand. In many markets, consumers have traded down or bought less often as household budgets tightened. At the same time, companies with heavy exposure to China and the United States have had to navigate tariff disputes and uneven recovery patterns.

For Rémy, those pressures have been especially acute because cognac remains central to its earnings. The category is closely tied to gifting, nightlife and discretionary spending, making it vulnerable when consumers pull back. Travel retail, once seen as a strong engine for premium spirits growth through airports and duty-free shops, has also become more volatile as international traffic patterns shifted and Chinese spending abroad changed.

Analysts said the scale of Rémy’s ambition was notable but that much of the expected improvement appears weighted toward the later years of the plan. Trevor Stirling, an analyst at Bernstein, said the strategy offered “big potential upside,” though he noted that most of the gains looked back-loaded into the 2028 and 2029 fiscal years.

For the current fiscal year, Rémy gave a more cautious outlook. The company said it expects only a slight improvement in current operating profit margin and a return to organic sales growth, rather than a sharp rebound. That suggests management sees recovery as gradual even while setting out much larger medium-term goals.

Rémy said it would present broader medium-term targets tied to the turnaround plan in November. Until then, investors will be watching whether early steps such as channel expansion, lower-priced launches and growth outside cognac can begin to offset weakness in its core business and restore momentum in markets that have become harder to predict.