Remy to Focus on Premium Brands After Full-Year Profit GainsClementine Fletcher
Remy Cointreau SA, the maker of Remy Martin cognac, said it will focus on pushing high-priced drinks to drive growth after reporting an increase in annual profit due to cognac sales in Asia and the U.S.
Adjusted operating profit rose to 245.4 million euros ($326 million) in the year ended March 31 from 207.7 million euros a year earlier, the Paris-based company said today. That compares with the 247 million-euro median estimate of 11 analysts surveyed by Bloomberg News. Excluding acquisitions and currency fluctuations, operating profit rose 12 percent. Remy had aimed to increase profit by about 10 percent.
The company said it’s confident it can continue to generate profitable growth over the medium- to long-term even in an economic environment that “lacks visibility.” The distiller had already reported sales growth figures in April.
Remy fell 0.5 percent to 86.26 euros at 9:24 a.m. in Paris trading, trimming this year’s gain to 4.3 percent.
The company got 60 percent of full-year sales from Remy Martin, whose revenue growth slowed to 13 percent on an organic basis from 25 percent the year earlier. Organic operating profit rose 19 percent at the cognac unit.
Producers of the French spirit have cautioned that growth in China could wane as demand for the drink is restrained by a government anti-extravagance campaign affecting banquets and gift-giving of expensive bottles of spirits. Competitor Pernod Ricard SA said in April Chinese sales will grow at a slower pace than last year. Remy said today that profitability was boosted by “price increases and very high quality innovations,” particularly in Asia and in the U.S.