Remy Cointreau Sales Growth Beats Estimates
Remy Cointreau SA (RCO), France’s second- biggest distiller, fell the most in more than three months in Paris trading after forecasting a slower rate of profit growth in the second half of the financial year.
Operating profit for the year through March may rise 15 percent to 18 percent, excluding acquisitions and currency shifts, Finance Director Frederic Pflanz said on a conference call today. Remy reported a 31 percent gain in the first half.
“He’s given very cautious guidance,” said Trevor Stirling, an analyst at Sanford C. Bernstein in London. Pflanz didn’t give a reason for the probable slowdown in earnings growth, though he said the Paris-based company plans to boost advertising and promotional spending.
Remy shares fell as much as 5.9 percent, the steepest intraday decline since Oct. 4, even after the company reported growth in third-quarter sales that was double the pace analysts expected. Cognac sales in Asia boomed in advance of the Chinese New Year, which occurs 11 days earlier than last year.
So-called organic sales, which exclude acquisitions, disposals and currency fluctuations, rose 31 percent in the three months ended Dec. 31. The median estimate of seven analysts surveyed by Bloomberg News was for 15 percent growth.
Revenue for the nine months through December rose to 821 million euros ($1.1 billion), representing organic growth of 23 percent, the company said. Sales rose 18 percent on that basis in the first six months of the year, Remy said in November.
Chinese New Year
Organic sales at the cognac unit soared 37 percent over the nine-month period, aided by the early Chinese New Year and drinkers buying more-expensive bottles of Remy Martin. The Chinese New Year is Jan. 23, while it was on Feb. 3 in 2011.
“Taking into account the exceptional items included in the third quarter, the group anticipates a decline in the fourth quarter,” the company said. “However, a strong full-year increase in turnover should be posted.”
Remy was down 4 percent at 63.74 euros as of 10:38 a.m., reducing the stock’s gain this year to 2.7 percent.
Sales at the liqueurs and spirits unit rose 8 percent in the nine months and 10 percent in the third quarter as more consumers in the U.S. and Europe bought Cointreau.
Remy got about three-quarters of operating income from cognac sales last year, and has benefited for strong demand for the spirit in China.
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