Remy Cointreau Sales Beat Estimates on China, U.S. Demandby
Shares rise as much as 5.4%, biggest gain since September
Mainland China growing, while Hong Kong, Macau keep declining
French distiller Remy Cointreau SA reported third-quarter sales that beat estimates as appetite for cognac grew in the U.S. and rebounded in China.
Sales rose 3.2 percent on an organic basis in the three months through December after a first-half decline, the Paris-based company said in a statement Thursday. Analysts expected a 2.3 percent increase, according to the median of 16 estimates. The stock rose as much as 5.4 percent in Paris, the biggest gain in more than three months.
Mainland China is driving the return to growth in the region, while Hong Kong and Macau remain in decline, Chief Financial Officer Luca Marotta said on a call with investors. The timing of the Chinese New Year, which is 11 days earlier in 2016 than in 2015, also probably boosted sales ahead of the holiday, according to Hermine de Bentzmann, an analyst at Raymond James.
“Overall good numbers from Remy and the positive commentary on China is very welcome given the recent market concerns,” wrote Jonathan Fyfe, an analyst at Mirabaud.
The maker of Remy Martin cognac has changed distributors in China amid a government crackdown on graft that has dented sales of high-end spirits. It’s also been trying to shore up growth of its partner brands after losing a distribution contract for Piper and Charles Heidsieck champagnes in the U.S. Remy Martin continued an “excellent” performance in the Americas and Europe, helped by a new marketing campaign.
The company reiterated it expects a return to growth in full-year adjusted operating profit, excluding currency shifts.
Total revenue reached 298 million euros ($325 million), compared with the estimate of 294 million euros. Remy Cointreau said last year that it intends to become the global leader in spirits sold for $50 a bottle or more -- an $18 billion market which is growing at more than twice the pace of lower-priced alcohol.