Remy Cointreau Toasts Robust Results
French spirits group Remy Cointreau has beaten expectations for first-half operating profit and said it saw no signs of a slowdown in China, where demand for its premium cognac is thriving.
The maker of Remy Martin cognac and Cointreau liquor is accelerating a drive to sell higher-priced spirits to boost profit margins.
Finance chief Luca Marotta said he was "okay" with market estimates for a 13.5% rise in full year 2018/19 current operating profit at constant rates and scope.
Markets are on edge over trade tensions between Beijing and Washington that could impact Chinese consumers, whose appetite for branded goods has supported a luxury industry rebound over the past two years.
Chief Executive Valerie Chapoulaud-Floquet, however, said Remy had not seen any slowdown in China so far, after growing by between 20% and 30% in the country in the first half.
"We can confirm that China remains very buoyant. Our Chinese customers are very confident. We had a very good Mid-Autumn festival and expect a very good Chinese New Year in February," said Chapoulaud-Floquet.
Remy's French rival Pernod Ricard also said last month that it had benefited from strong demand in China and India as Pernod reported higher sales, although Pernod cautioned that sales growth would moderate later on.
Operating Profit And Sales
Remy Cointreau said group operating profit for the six months to September 30 totalled €138 million, for like-for-like growth of 10.1% and beating a consensus forecast for a profit of €135.1 million.
Remy Cointreau has been focusing on selling spirits priced at $50 a bottle or more, as part of a strategy that has benefited from a rebound in Chinese demand as well as from solid sales in the United States, its top market.
Its products include Louis XIII luxury cognac that sells for over $2000 a bottle.
Operating profit at the Remy Martin cognac division, reached €119.5 million in the first half, accounting for 86% of group profit.
This marked a like-for-like rise of 11.3% and reflected strong demand in Asia and Australia, as well as positive trends in America and the travel and retail sectors.