Remy confident on outlook after firm flags 'exceptional' first half profit growth

10/22/2021 | 06:47am

PARIS (Reuters) -Remy Cointreau said on Friday it was growing increasingly confident about its full year outlook after second-quarter sales beat expectations on the back of strong demand for its premium cognac in the United States, China and Europe.

Finance Chief Luca Marotta told analysts he was now "relatively comfortable" with a consensus for full year 2021/22 current operating profit growth of 21%, up from a "mid-teens" forecast in July.

Marotta was speaking after the maker of Remy Martin cognac and Cointreau liquor forecast "exceptional" current operating profit growth in the first half of its 2021/2022 fiscal year, which began in April, with sales up almost a quarter in the three months to end-September, albeit from a low base last year during the pandemic.

"Remy Cointreau reiterates its confidence in its ability to outperform the exceptional spirits market and anticipates strong growth in sales, mainly driven by the performance in the first half," the company said in a statement.

It has already said it plans to substantially increase marketing spending during the second half.

By 0928 GMT, Remy shares were up 1.6% at 176.30 euros.

"We believe the group is well placed to continue to surprise to the upside on earnings through the remainder of the year," Citi analysts wrote in a note.

Second quarter sales totalled 352.2 million euros ($409.4 million) - a like-for-like rise of 23.7%, which beat analysts' expectations for a 20.8% growth - reflecting a strong demand rebound in bars and restaurants as COVID-19 restrictions eased around the world, and resilient at-home consumption.

Cognac sales alone reached 265 million euros, a like-for-like rise of 26.9%, which notably reflected a very strong performance in China during the Mid-Autumn Festival.

Marotta said the group was quite optimistic about prospects for Chinese New Year celebrations in February, but in the United States, where cognac demand was underpinned by a thirst for premium spirits, the low inventory levels were leading to supply tensions.

Group sales grew 52% in the first half on a like-for-like basis, including a 55.2% jump for cognac.

Larger rival Pernod Ricard on Thursday said solid sales growth could moderate in the 2022 fiscal year, after strong demand in China, the United States, India and Europe helped it post above-forecast sales in its first quarter.

($1 = 0.8602 euros)

(Reporting by Dominique Vidalon; Editing by Subhranshu Sahu, Kirsten Donovan)

By Dominique Vidalon

© Reuters 2021
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