Remy First-Half Sales Miss Estimates as Cognac Growth Slows
Remy Cointreau SA (RCO), France’s second- biggest distiller, fell the most in more than three years in Paris trading after reporting revenue that missed estimates as cognac sales growth slowed in the second quarter.
Organic revenue climbed 13 percent in the six months through September, the Paris-based company said today, missing the median estimate of nine analysts for an 18 percent increase. Revenue rose 5.3 percent in the second quarter, having climbed 24 percent in the first three months of the fiscal year. Remy’s shares plunged 8 percent, the biggest drop since March 2009.
“We expect the performance to be regarded as a slight miss, particularly regarding organic cognac growth,” analysts at Berenberg Bank in London including Philip Morrisey wrote today in a note. Berenberg had estimated second-quarter organic revenue growth of 8.2 percent.
First-half sales at Remy’s cognac unit rose 20 percent, with growth slowing to 8 percent in the second quarter. Demand for high-priced Remy Martin cognacs in emerging markets such as Asia has helped boost Remy’s share price more than competitors Diageo Plc (DGE) and Pernod Ricard SA this year. Analysts at UBS AG and JP Morgan Cazenove had expected second-quarter cognac sales growth of 18 percent.
Cognac growth in Asia was “principally driven by ultra- premium qualities,” Remy said.
Remy shares closed down 7 euros at 80.24 euros in Paris. Pernod Ricard, which sells Martell cognac, declined 2.4 percent.
Liqueur and spirits sales edged up 3.5 percent on an organic basis in the first half, held back by slowing volumes of the company’s Metaxa liquor, which is mostly sold in Greece.
Diageo, the maker of Johnnie Walker Scotch whisky, yesterday reported first-quarter sales growth in Asia that fell short of analysts’ estimates as some airport sales were booked in the second quarter. The distiller also saw lackluster demand for vodka in South Korea and India, though there was “continued good performance” in regions including China.
“Growth rates were satisfactory in the U.S. and Asia, although Europe lagged behind,” Remy said today. It confirmed an objective of “significantly improving its earnings.”
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