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PARIS (Reuters) -French spirits group Remy Cointreau beat third-quarter sales forecasts and said it was confident that demand for its premium cognac in China, the United States and Europe would underpin profit growth this year.
For the 2021/22 full year, Remy Cointreau kept a forecast of “very strong” organic growth in current operating profit and strong organic sales growth, and reiterated it was confident in its ability to outperform the premium spirits market.
For the three months to Dec. 31, group sales came in at 440.5 million euros ($498.1 million), an organic rise of 21%. That beat a company-compiled consensus from 18 analysts for 415.6 million euros.
Sales at the Remy Martin cognac division, which makes 90% of the group profits, rose 19.4% to 332.7 million euros, also above analysts’ estimates of 317.7 million euros.
The group said the third quarter performance reflected “remarkable” sales growth in China led by demand for its Club cognac, strong e-commerce sales during the Singles’ Day online shopping bonanza and demand ahead of the Chinese New Year that starts on Feb. 1.
Cognac demand in the United States also remained strong in the third quarter, with high-end brands such as Louis XIII cognac that sells for over $2000 a bottle, Remy Martin XO and 1738 Accor (PA:ACCP) Royal outperforming.
The COVID-19 pandemic has boosted Remy Cointreau’s drive towards higher-priced spirits to boost profit margins long term, accelerating a shift among consumers towards premium drinks, at-home consumption, cocktails and e-commerce.
Due to higher marketing and communication spending and a tougher comparison base in the second half, full-year profits will be driven solely by first-half growth, the group reiterated.
The French company’s fiscal year starts on April 1 and ends on March 31.
($1 = 0.8843 euros)
