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PARIS (Reuters) -French spirits group Remy Cointreau reported a higher-than-expected 16.2% organic rise in operating profit for its 2022/23 fiscal year, and stuck to its cautious outlook for this year.
The maker of Remy Martin cognac and Cointreau liquor reiterated a forecast of flat organic sales in the financial year 2023/24, with steady profitability, to reflect weaker U.S. demand and high year-ago comparables.
“With the normalization of consumption in the United States amplified by a high basis of comparison in the first half, and our drive to reduce inventories, we expect sales and profitability to hold steady in 2023/24 on an organic basis,” CEO Erc Vallat said in a statement.
During the COVID-19 pandemic, Remy Cointreau and rivals such as Pernod Ricard (EPA:PERP) benefited from people drinking more expensive types of alcohol at home.
There are, however, signs the spirits industry growth is slowing, notably in the United States, as positive effects from the pandemic fizzle out.
Remy Cointreau expects group sales to strongly decline in the first half of 2023/24 due to a “very strong” fall in sales in the U.S.
A steep rebound would follow in the second half in the U.S combined with a steep rise in China and the rest of the world, it said.
For the year ended March 31, 2023, solid demand for its premium cognac, along with cost controls, lifted operating profit to a record 429.6 million euros ($458.6 million), beating expectations of a 14.4% rise in a company-compiled consensus of 18 analysts.
The company previously reported group sales were 1.54 billion euros, marking an organic rise of 10.1%.
($1 = 0.9367 euros)
