(adds CFO comments, forecasts from call, shares, analyst)
By Dominique Vidalon and Pascale Denis
PARIS Oct 18 Remy Cointreau said
sales rose more than expected in the second quarter thanks to
recovering demand for cognac in China and growing appetite for
the premium brandy in the United States, its largest market.
Like other spirits makers, including larger rivals Diageo
and Pernod Ricard, Remy Cointreau was hit by
falling sales of cognac and other luxury goods in China
following a government crackdown on corruption and conspicuous
consumption since 2014.
"In China we benefited from a very strong Mid-Autumn
Festival," said Chief Financial Officer Luca Marotta. "We are
positively surprised by the acceleration we are experiencing in
The maker of Remy Martin cognac and Cointreau liquor, which
is on a drive to sell higher-priced spirits to boost
profitability, said it was comfortable with the consensus of
analysts' estimates for full-year organic operating profit
growth of 8 percent.
The company said that sales rose 7.4 percent to 294.8
million euros ($330.21 million) in the second quarter to Sept.
30, against a flat performance in the first quarter and beating
a company compiled consensus of 4.3 percent.
Sales of cognac rose 9.3 percent in the second quarter from
an 0.5 percent decline in the previous quarter.
Remy Cointreau has stepped up spending on advertising and
marketing, particularly in the United States to boost demand for
its Remy Martin and 1738 Accor Royal cognacs.
"With the cognac division accounting for 72 percent of
profits, we see Remy attractively positioned for medium-term
growth. We see upside as the CEO rolls out her vision for the
company as a niche super-premium business," said Jefferies
analysts in a note.
By 1259 GMT Remy shares were up 2.5 percent at 76.90 euros,
while shares in Pernod Ricard, which reports sales on
Thursday, were up 1.8 percent.
($1 = 0.8928 euros)
(Reporting by Dominique Vidalon; Editing by Mathieu Rosemain
and Louise Heavens)