French spirits group Rémy Cointreau posted a 25.1% jump in better-than-expected like-for-like sales in the third quarter and retained its annual outlook, driven by upbeat demand for its premium cognac in the United States and China.
The maker of Rémy Martin cognac and Cointreau liqueur also forecast like-for-like sales growth to be buoyant in the fourth quarter, though lower compared with its third-quarter revenue due to strategic inventory management.
For the 2020/21 full year, Rémy Cointreau upheld a forecast of positive like-for-like current operating profit growth and reiterated that it remained confident of its ability to emerge stronger from the COVID-19 crisis.
The positive growth forecast would mark a rebound from a group profit slump of 22% in full year 2019/20.
Sales Performance
Group sales reached €350 million euros in the three months ended December 31, against an average forecast of 14.3% organic growth in a company-compiled poll of 15 analysts.
Sales at the Rémy Martin cognac division, which makes the bulk of group profit, surged 33.1%, outperforming expectations of an 18.2% growth.
The third-quarter performance marked a strong rebound from a 16.4% sales slump in the first half and reflected catch-up effects in the United States, where at-home cognac consumption remained buoyant, the company said.
A recovery in Chinese demand also accelerated during the Mid-Autumn Festival and the "Double Eleven" or Singles' Dayonline shopping festival held on Nov. 11, 2020.
Although their decline slowed in the third quarter, duty-free sales remained weak due to travel restrictions and the slow reopening of bars and restaurants from the coronavirus-led lockdown continued to weigh on Southeast Asian sales. Foreign exchange and scope effects would weigh by €8 million and €2 million, respectively, on current operating profit in full year 2020/21, Rémy Cointreau said.
The French company's fiscal year starts on 1 April and ends on 31 March.
News by Reuters edited by Donna Ahern, Checkout. Click subscribe to sign up for the Checkout print edition.
