Remy targets 60% profit growth in three years under revival plan

By Dominique Vidalon and Emma Rumney

PARIS/LONDON, June 4 (Reuters) - Cognac maker Remy Cointreau on Thursday set out a three-year turnaround plan, targeting a €100 million ($116.1 million) increase in operating profit and a doubling of sales in travel retail and emerging markets.

The goal, outlined by CEO Franck Marilly, would lift operating profit by more than 60% and sent shares up by more than 14%, even as Remy reported an 11.5% drop in annual organic operating profit and halved its dividend.

The company, which makes Remy Martin cognac and Cointreau liqueur, has seen sales decline and investor support weaken since 2023.

Marilly, who took the top job around a year ago, launched the plan in April but is now laying out details for the first time.

REMY TO LAY OUT GOALS IN NOVEMBER

Hit by a sector slowdown driven by rising living costs and tariffs in its two biggest markets, the U.S. and China, Remy is seeking to reduce its reliance on economic cycles and broaden its growth base.

The strategy centres on widening its consumer reach and reshaping its products. The group plans to launch a more affordable Remy Martin in the U.S. from the first quarter of its 2027 to 2028 financial year, expand into new channels such as convenience stores, and target under-penetrated groups including Asian consumers in the United States.

It will also push smaller formats, grow its non-cognac brands and launch an emerging markets division to tap growth in places like India and Brazil, he continued.

The company is also reviewing its portfolio, with Marilly saying there are "no sacred cows".

Remy plans to lay out medium-term goals supported by the plan in November.

Trevor Stirling, analyst at Bernstein, said Remy's plan offered "big potential upside" but was back-loaded to its 2028 and 2029 financial years.

In its current financial year it targets only a slight improvement in current operating profit margin and a return to organic sales growth.

($1 = 0.8615 euros)

(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta, Mrigank Dhaniwala and Louise Heavens)