French spirits group Rémy Cointreau has delivered better-than-expected first quarter results, as a recovery in cognac sales helped offset declines in liqueurs and spirits.
Sales at the Rémy Martin owner rose 1.3% organically to €223.2m, ahead of the 0.2% rise forecast by analysts. Cognac sales climbed 7.7% organically, with strong growth in APAC offsetting declines in the Americas.
Spirits and liqueur sales, meanwhile, fell 6.6% organically, compared to analyst forecasts of a 1.5% decline. Rémy blamed “unfavourable phasing” of shipments in the US for the miss.
Despite the beat, the Cointreau brand owner maintained its full-year forecasts for the year. It expects to return to “sustainable” organic sales growth, with sales improving “progressively over the year”.
Full-year sales at Rémy Cointreau declined 5% to €935.3m in the year to 31 March, with the majority of the decline coming from currency movements. The group registered organic sales growth of 0.2% during the year.
Shares in Rémy fell by 5.4% in mid-morning trading, with analysts cautioning the first-quarter sales rise was not yet sufficient evidence of recovery.
“There are some positive signs, but no recovery yet for cognac in either the US or China,” Bernstein analysts said.
Barclays analysts noted that cognac pricing remains under pressure. “The sustainability of the recovery still needs evidence beyond a seasonally small quarter,” they added.
In April, Rémy Cointreau CEO Franck Marilly unveiled a five-point transformation plan, with key targets including reigniting growth in cognac, improving efficiencies in distribution and centralising procurement.
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