Remy Cointreau SA (RCO), the maker of Mount Gay rum, reported fourth-quarter revenue that beat analysts’ estimates, aided by demand for pricier variants of its Remy Martin cognac during the Chinese New Year holiday.
So-called organic sales rose 12 percent in the three months through March, Paris-based Remy said today in a statement. The increase exceeded the median 8.6 percent growth estimate of 10 analysts surveyed by Bloomberg News.
Organic sales of Remy Martin cognac rose 14 percent thanks to demand in Asia and the Americas in the quarter, helping alleviate concern about slowing sales in China. Remy shares rose as much as 4.9 percent, the biggest gain in three months.
“Fourth-quarter numbers provide reassurance, in our view, on the resilience of the cognac category in Asia,” Andrea Pistacchi, Adam Spielman and colleagues at Citigroup Inc. in London wrote today in a report. “The shares have been very soft in the past two months on concerns about trading in China.”
More sales were booked in the quarter from the Chinese New Year festival, which fell 18 days later this year than in 2012. Sales in the previous three-month period beat estimates after demand for the cognac increased more than expected.
Remy shares traded up 2.9 percent at 88.48 euros at 10:20 a.m. in Paris after showing the biggest intraday gain since Jan. 17 earlier. That almost doubled the stock’s gain this year to 7.4 percent, valuing the drinkmaker at 4.52 billion euros ($5.9 billion).
Distillers including Remy are looking to growth in emerging markets to offset tougher conditions in Europe as a recession amid government cost-cutting restrains consumer spending. The company said today that sales growth was “driven by the move upmarket of the entire brand portfolio,” as well as by investments and distribution expansion.
Competitor LVMH Moet Hennessy Louis Vuitton SA (MC) said on April 15 that quarterly organic volume of its Hennessy cognac brand rose 5 percent, aided by demand in the U.S. and high single-digit percentage increases in volume in China.
Shares of Pernod Ricard SA, the Paris-based maker of Martell cognac, plunged in March after the company reported “softness” in revenue during Chinese New Year.
Remy said in November that it anticipated “more moderate” growth in the second half of the fiscal year, while it planned to “significantly” increase full-year earnings. The company said today that it will focus on increasing operating profit about 10 percent on a like-for-like basis. The distiller will report annual figures on June 11.
Full-year organic revenue, which excludes the effects of acquisitions, disposals and currency fluctuations, gained 8.8 percent.
To contact the reporter on this story: Clementine Fletcher in London at email@example.com
To contact the editor responsible for this story: Celeste Perri at firstname.lastname@example.org