Drinks giant Diageo PLC (LSE:DGE) opened higher on Wednesday, appearing unfazed by a profit warning from French rival Remy Cointreau, which abandoned its long-term growth targets due to persistent weakness in key markets and the impact of tariffs.
Remy, best known for its cognac and Cointreau liqueur, said its 2030 sales ambitions were no longer achievable, citing continued sluggish demand in the US, ongoing pressure in China, and trade tariffs on its flagship cognac.
In a worst-case scenario, it warned operating profit for 2025/26 could take a hit in the high teens.
Annual operating profit for the year ended March fell 30.5% on an organic basis to €217 million, slightly better than analyst expectations. Cost cuts of €85 million helped cushion the blow.
Incoming chief executive Franck Marilly will now develop a new strategic plan as Remy joins peers Diageo and Pernod Ricard in walking back targets set during the post-pandemic spirits boom.
For Diageo, the worst-case scenario appears to have been priced in with the stock down 22% year-to-date. The stock opened 2p higher at 1,992.5p.