(Updated with new quote)
PARIS, Jan 25 (Reuters) – Rémy Cointreau RCOP.PA said it was confident on Tuesday that demand for its premium cognacs in China, the United States and Europe will support its earnings growth this year after having performed better than expected in the third quarter.
The cognac producer, however, was more cautious about its forecasts for the Chinese New Year celebrations which begin on February 1, resulting in a stock market sanction.
At 1:19 p.m., Rémy Cointreau shares fell 5.1% to 182.1 euros after initially opening higher.
“We are optimistic about the Chinese New Year but a bit more cautious than two months ago. Chinese New Year 2022 will be strong, but not the best ever for the sector,” said Chief Financial Officer Luca Marotta. during a conference call with analysts.
The COVID-19 pandemic has prompted Rémy Cointreau to focus on the most luxurious spirits to boost its long-term margins, accelerating the shift in consumer trends towards premium drinks, home tasting, cocktails and online trading.
In the third quarter, the turnover of the cognac producer stood at 440.5 million euros, organic growth of 21%, while analysts expected an increase of 15.1% according to a consensus provided by the company.
Sales of the Rémy Martin cognac brand, which accounts for 90% of the group’s results, increased by 19.4% to 332.7 million euros, again beyond analysts’ forecast of an increase by 14.9%.
The group confirmed on Tuesday its financial objectives for the 2021-2022 financial year, which it had raised at the end of November. It is still counting on “strong” organic growth in its turnover and a “very strong” increase in its current operating profit for the financial year which will end at the end of March.
CFO Luca Marotta told analysts that consensus forecasts of a 38% increase in current operating profit and a 26.5% increase in revenue for 2021-2022 were “at the right level”.
(Report Dominique Vidalon, Blandine Hénault for the French version, edited by Bertrand Boucey and Sophie Louet)