Remy Cointreau raises H1 profit outlook as Q2 sales beat estimate

[PARIS] Remy Cointreau said on Tuesday its first-half core profit will fall less than expected after the company posted a broader recovery in second-quarter sales, powered by robust demand for its premium cognac in the United States and China.

Demand was buoyed by customers staying at home in the United States, and by a recovery in China during the country's Mid-Autumn celebrations, which partly offset a slump in travel retail sales triggered by the coronavirus outbreak.

Second-quarter sales at Remy Cointreau reached 280.8 million euros (S$448.86 million), down 4 per cent at constant exchange rates and excluding the effect of acquisitions or disposals.

Quarterly numbers for the maker of Remy Martin cognac and Cointreau liqueur, however, came in better than market expectations of a 5.9 per cent fall in the second quarter, and followed a 33.2 per cent sales decline in the first quarter.

Cognac sales, which comprise 74 per cent of group sales, fell 2.5 per cent in the quarter, slower than the 4.9 per cent decline forecast.

The Paris-based spirits maker now expects current operating profit for the six months ended Sept.30 to be down 25-30 per cent on a like-for-like basis, compared with a drop of 35-40 per cent forecast in July.

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Despite an uncertain economic and health environment, Remy Cointreau reiterated that its second half should continue to benefit from a strong recovery driven by the United States and Mainland China, its two key markets.

REUTERS