LONDON, June 6 (Reuters) - Remy Cointreau reported a smaller-than-expected decline in annual organic operating profit on Thursday, down 27.8%, and said sales should gradually recover over the course of its next financial year.

The French cognac maker said the steep decline in operating profit was driven by challenges in the key U.S. market, which have hurt sales. Analysts had predicted a 28.2% drop.

The company, which makes the Remy Martin cognac, predicted that its sales would gradually improve over the course of next year, though issues in the U.S. and beyond would continue to weigh in the first half.

It added that progress towards its long-term targets will resume, including high single-digit annual sales growth, from 2025-26. (Reporting by Emma Rumney; Editing by Janane Venkatraman )