July 21 (Bloomberg) -- Remy Cointreau SA, the maker of Remy Martin, reported first-quarter sales that beat analysts’ estimates, boosted by higher cognac revenue.
So-called organic sales, which exclude the effect of acquisitions and disposals, rose 23 percent, the company said today in a statement. That beat the median estimate of eight analysts surveyed by Bloomberg News for a 5.8 percent increase. Total revenue in the three months to June 30 rose to 198.6 million euros ($283.2 million) from 170.9 million euros.
“It was a blow-out quarter with sales far better than we and the market expected,” Jamie Isenwater, an analyst at Deutsche Bank in London, said today. “Overall, numbers are much better than we would ever have contemplated and we’d expect to see consensus upgrades today.”
Remy’s shares rose as much as 2.70 euros, or 4.6 percent, to 60.90 euros, and traded 4.2 percent higher at 60.67 euros as of 10:59 a.m. in Paris.
Cognac sales rose 32 percent in the period as customers selected more higher-priced bottles. Distillers including Paris-based Remy are looking to sales of high-priced drinks in emerging markets including China to drive growth and offset sluggish demand in Europe.
The company reported “double-digit growth” in Asia, the U.S. and Europe. Sales of Metaxa, for which the company had to take a gross impairment charge of 45 million euros last year, are “gradually stabilizing” after two years of decline, the company said. The Cointreau, Mount Gay Rum and St Rémy brands saw “good growth,” it said.
“Although the markets have significantly improved, the overall business environment remains unstable,” the company said today. “Significant marketing investment” as well as the “efficiency” of its distribution network helped growth in the quarter.
Remy said on July 8 that it completed the sale of its champagne unit to EPI group. The company will continue to distribute the Piper-Heidsieck and Charles Heidsieck brands globally, as well as Piper Sonoma in the U.S., it said today. First-quarter champagne sales grew in the U.S. and Asia, Remy said, “with more contrasting results in Europe.”
The company expects to have a better understanding of annual growth rates at the time of first-half results later in the year, Finance Director Frederic Pflanz said today. “We’re doing fine at the moment,” he said on a conference call. “I don’t think the results should be extrapolated for the rest of the year.”
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