Remy Cointreau shares rose the most in almost two years after the French distiller reported third-quarter sales that beat analysts’ estimates on a surge in Remy Martin cognac shipments ahead of Chinese New Year festivities.
The stock surged as much as 10 percent to 90 euros in Paris, the steepest intraday advance since April 2014. Revenue from the company’s Remy Martin unit rose 22 percent on an organic basis in the three months through December. Analysts expected 8.8 percent growth. Total sales rose 9 percent on the same basis, beating the 4.2 percent consensus.
“The headlines and underlying performance certainly impress,” Jonathan Fyfe, an analyst at Mirabaud, said in a note.
Chinese retailers have been stocking up on cognac to prepare for a New Year that takes place earlier this year. Sales in that market have been gradually improving, ending a slump caused by a five-year government crackdown on graft. The maker of Bruichladdich whisky joins other purveyors of high-end goods such as fashion house Burberry Group and Cartier owner Richemont in seeing demand rebound in China.
Excluding the effect of the earlier New Year celebration, Remy Martin’s sales growth would have been 19 percent, Jean Letzelter, an analyst at Exane BNP Paribas, wrote in a note. Beyond China, the company said Russian cognac sales returned to “robust growth” while the Americas saw “strong momentum.”
The Paris-based distiller also confirmed its forecast for growth in full-year operating profit, excluding currency effects.
News by Bloomberg, edited by Hospitality Ireland