Remy Cognac Sales Unexpectedly Increase on Asia, U.S. DemandClementine Fletcher
Remy Cointreau SA, the maker of Remy Martin cognac, reported third-quarter sales that beat estimates after demand for the French spirit increased more than analysts expected, buoyed by Asia and the U.S.
So-called organic sales rose 0.5 percent, the company said today in a statement, compared with the median 0.6 percent decline estimated by 12 analysts. Sales of the Paris-based distiller’s Remy Martin cognac increased 1.7 percent, even as analysts estimated a 2.5 percent decline.
Remy sells a large percentage of its cognac in Asia, particularly more expensive variants of the spirit, where demand remained “very strong,” even with the Chinese New Year falling on a later date in 2013 than in 2012, pushing some of those sales into the fourth quarter, it said. Sales also improved in Russia, some western European countries and the U.S.
“We see Remy’s third-quarter performance as solid,” Laetitia Delaye, an analyst at Kepler in Paris, wrote today, considering last year’s high comparative figures and the “adverse technical effects” of the timing of Chinese New Year, which is 18 days later this year than in 2012. Third-quarter organic sales increased 31 percent last year.
Remy’s shares rose as much as 3.9 percent to 91.83 euros ($122) in Paris trading, the highest price since Sept. 7. Its shares have advanced 38 percent in the last twelve months.
Total cognac shipments fell 3 percent in December, Barclays Capital said in a note Jan. 15, citing data from the Bureau National Interprofessionnel du Cognac, with Asian shipments down 15 percent due to the later Chinese New Year. Competitors Pernod Ricard SA and LVMH Moet Hennessy Louis Vuitton SA also export the spirit.
Remy said Dec. 18 it had agreed to buy the entire share capital of Larsen, another cognac maker.
Sales at Remy’s Liqueurs and Spirits unit also increased, aided by “strong gains” in Cointreau in the U.S. in particular. Distribution of Scotch whiskies in the country also showed “remarkable growth” but failed to offset the effect of weak consumer spending in Europe on champagne.
Total revenue for the three months through Dec. 30 was 368.6 million euros, compared with the 359 million-euro median estimate. Organic sales increased 7.9 percent in the first nine months of the year.
Remy, which warned in November that it expected “more moderate” growth in the second half of its fiscal year, repeated today it expects to “significantly” increase its full-year earnings. The company said it will report full-year sales on April 18.