French spirits group Rémy Cointreau reported a higher-than-expected 16.2% organic rise in operating profit for its 2022/23 fiscal year, and stuck to its cautious outlook for this year.
The maker of Rémy Martin cognac and Cointreau liquor reiterated a forecast of flat organic sales in the financial year 2023/24, with steady profitability, to reflect weaker US demand and high year-ago comparables.
"With the normalisation of consumption in the United States amplified by a high basis of comparison in the first half, and our drive to reduce inventories, we expect sales and profitability to hold steady in 2023/24 on an organic basis," CEO Eric Vallat said in a statement.
During the COVID-19 pandemic, Rémy Cointreau and rivals such as Pernod Ricard benefited from people drinking more expensive types of alcohol at home.
There are, however, signs the spirits industry growth is slowing, notably in the United States, as positive effects from the pandemic fizzle out.
Forecast
Rémy Cointreau expects group sales to strongly decline in the first half of 2023/24 due to a 'very strong' fall in sales in the US.
A steep rebound would follow in the second half in the US combined with a steep rise in China and the rest of the world, it said.
For the year ended March 31, 2023, solid demand for its premium cognac, along with cost controls, lifted operating profit to a record €429.6 million, beating expectations of a 14.4% rise in a company-compiled consensus of 18 analysts.
The company previously reported group sales were €1.54 billion, marking an organic rise of 10.1%.
Read More: Rémy Cointreau Shares Slide As Cognac Sales Boom Looks To Have Peaked
