By Dominique Vidalon
PARIS (Reuters) -Remy Cointreau on Friday gave higher-than-expected operating growth guidance for its 2020/21 fiscal year, after surging demand for its premium cognac in China and the United States lifted sales at the French drinks group.
The maker of Remy Martin cognac and Cointreau liqueur follows Pernod Ricard – owner of Martell cognac and Mumm champagne – which on Thursday also offered an upbeat outlook for the coming months as COVID-19 restrictions on bars and restaurants start to ease.
In China in particular, where measures to curb the coronavirus were lifted before other markets, drinks companies said they had performed well during Chinese New Year celebrations.
Luxury goods groups operating in fashion, such as Hermes and have also reported rebounding sales in the first three months of 2021 in China, offsetting enduring COVID-19 lockdowns in some European countries.
Remy Cointreau said it expected organic growth of around 10% in operating profit for the 2020/21 fiscal year, which ended on March 31, after its fourth quarter sales rose by 15.1%.
It said a favourable comparison to 2020 levels, when pandemic lockdowns came into force globally, as well as more buoyant consumer trends in the United States would also help a strong start to the new financial year.
“In a still uncertain public health, economic and geopolitical environment, Remy Cointreau remains confident of its ability to emerge stronger from the COVID-crisis,” the group said in a statement.
The 10% profit growth guidance – which would mark a rebound from a 22% fall in group profit in the full year 2019/20 – exceeds current analysts’ expectations for a 7.6% profit rise.
Sales for the three months to March 31 came in at 229.4 million euros ($275.9 million), marking a like-for-like rise of 15.1%. That was slightly below analysts’ expectations for 15.9%.
Remy Cointreau shares were down 0.46% at 0754GMT.
‘EXCELLENT’ CHINESE NEW YEAR
Cognac sales alone stood at 162.5 million euros – a like-for-like rise of 18.2%.
Cognac demand in the United States remained strong, boosted by at-home consumption, albeit somewhat moderated by the group’s previously announced decision to manage its strategic inventories.
Foreign exchange and the effects of acquisitions and divestments would impact operating profit in full-year 2020/21 by 5 million euros and 2 million euros respectively, Remy Cointreau said.
($1 = 0.8315 euros)
(Reporting by Dominique Vidalon;Editing by Sudip Kar-Gupta, Jane Merriman and Susan Fenton)
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