PARIS (Reuters) -French spirits group Remy Cointreau reported a smaller-than-expected 30.5% drop in annual organic operating profit, withdrew its mid-term goals and said sales would return to mid-to-single-digit growth during the next financial year.

The company, which makes Remy Martin cognac and Cointreau liqueur, said on Wednesday that the lower profits reflected weak sales in its key markets of China and the United States, where the group also faces tariff threats.

This was partially offset by cost cuts worth 85 million euros ($97 million), which outpaced an initial cost savings plan of 50 million euros.

Remy Cointreau, which last week named luxury goods veteran Franck Marilly as its new chief executive, said it had decided to withdraw its objectives for 2029-30, citing continued uncertainty tariffs.

Its group operating profit fell 30.5% on an organic basis to 217 million euros ($247 million) for the full year ended March 31, 2025. Analysts had expected a fall of 31.7%, according to a company-compiled consensus of 15 analysts.

The company makes around 70% of its sales from cognac, mostly in the U.S. and China.

Remy's sales have come under pressure amid a sluggish Chinese economy and threats of tariffs on European brandy. Meanwhile, high interest rates and inflation have led to steep sales declines in the United States, where Remy's rivals have also been cutting prices and eating into the firm's market share.

For the financial year 2026, Remy Cointreau estimates, under what it calls its "worst case scenario", it could suffer an organic decline in current operating profit in the mid-teen to high-teen range as a result of U.S. and Chinese tariffs.

($1 = 0.8800 euros)