2024-04-12 05:44:59 ET
Summary
- Remy Cointreau's sales of cognac and brandy have continued to decline, hit by destocking in major markets and consumers trading down to cheaper brands.
- The Chinese government's investigation into European cognac producers for potential anti-dumping violations could significantly impact Remy's sales in China (30% of its revenue) and company profits.
- Weakness in U.S. sales is also a concern for Remy, as the brandy/cognac category has continued to perform poorly.
- Remy Cointreau shares are starting to look more interesting, but I would prefer to see more evidence of stabilizing volumes in the key U.S. and China markets.
These are tough times to be in the cognac business. While consumers continue to drink alcohol, despite concerns about generational shifts in tastes and the impact of factors like GLP-1 drugs, they are most definitely not drinking as much cognac or brandy as in the past, and when they are, they’re typically trading down to cheaper brands....
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Hit Hard By Weak Cognac Demand, Remy Cointreau Could Yet Be A Value Trap