French spirits giant Rémy Cointreau has reported a significant rebound in its US cognac sales, marking a potential turnaround after a period of decline. The company, known for its Rémy Martin cognac and Cointreau liqueur, has faced challenges in both the US and Chinese markets, which are crucial for its cognac sales. Despite missing fourth-quarter sales forecasts, the company's shares rose more than 5% following the announcement of a 'steep recovery' in the US market.

The recovery in the Americas, particularly in the US, comes after a period of high inflation and interest rates that had dampened sales. Rémy Cointreau highlighted a 'very favourable' comparison base as a key factor behind the sharp rebound. The company also noted the positive impact of an action plan targeting the cheapest version of Rémy Martin cognac, which is popular in the US market. However, the company continues to face headwinds in China, where sales have been affected by tariffs and the halt of duty-free cognac sales due to a trade dispute between Beijing and Brussels.

Analysts have expressed mixed feelings about Rémy Cointreau's prospects. While some see the US recovery as a sign of resilience, others caution that the rebound is on an 'easy comp base' and that underlying challenges remain. The company's full-year sales declined by 18% on an organic basis, with the cognac business, which accounts for the majority of revenue, seeing a significant drop in sales. Despite these challenges, Rémy Cointreau has confirmed its current operating margin target for 2024-25, signaling confidence in its long-term strategy.

Looking ahead, Rémy Cointreau describes the 2024-25 fiscal year as a 'year of transition,' with plans to resume its growth trajectory in the following years. The company has set ambitious targets, including high single-digit annual sales growth and a gradual improvement in operating profit margin. With the US market showing signs of recovery and strategic measures in place to address challenges in China, Rémy Cointreau aims to navigate the current uncertainties and strengthen its position in the global spirits market.