January 24, 2020 / 6:32 AM / a month ago

Hong Kong protests weigh on Remy Cointreau Q3 sales

PARIS, Jan 24 (Reuters) - French spirits group Remy Cointreau posted a worse-than-expected 11.3% fall in third quarter like-for-like revenues, as demand for cognac in Hong Kong was impacted by protests in the region.

Slow stock replenishment in the United States also impacted Remy’s third quarter performance.

These negative factors more than offset a stronger performance in mainland China, where the Lunar New Year, a crucial moment for the drinks industry in that country, starts on Jan. 25.

This year’s event will, however, take place amid rising worries over a coronavirus outbreak in the country.

Group sales reached 290.2 million euros ($322 million)in the three months to Dec. 31, showing a like-for-like decline of 11.3%. This compared with average expectations for a 6 percent decline in a company-compiled poll of 16 analysts.

Cognac sales alone fell 7.6%, worse than analysts’ expectations for a 2.3% decline.

In December, Richemont’s Eric Vallat replaced Valerie Chapoulaud-Floquet as Remy CEO. Chapoulaud-Floquet had been the architect of Remy’s push towards higher-priced spirits to drive profit margins.

The group said on Friday that it had decided to hold off on previously provided annual and mid-term goals but was nevertheless confirming “the pertinence of its value strategy”.

The publication of the annual 2019/20 results on June 4 will be the occasion to provide a new strategic roadmap, added Remy.

$1 = 0.9014 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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