Remy Cointreau beats the Street thanks to focus on high-end spirits
Iconic cognac maker Remy Cointreau reported first half financial results at the end of last week, demonstrating a strong underlying business that’s benefiting from continued Chinese demand. The company had previously announced strong sales for the six-month period, but now we know that there’s more to the story, including better profitability and an improving margin.
Remy Cointreau’s share price has appreciated by 1% over the past 5 days
Source: Yahoo Finance
Against the first half of the previous year, Remy Cointreau said that current operating profit rose by 10% on an organic basis to 138 million euros. That beat analysts’ expectations for 132 million euros. Remy said that its gross margin also improved, widening by 1%. Previously, the company had released the first half’s sales figure: a 7.7% rise against the year-ago period.
The company’s CEO, Valerie Chapoulaud Floquet, said: “In the first half, the takeaway point, we can say it's a positive half yearly period, very much in line with our expectations and to our budget.” She added that the company had seen “very strong” growth in Asia Pacific (10% organic growth from the same period in the previous year), and that Remy was “outpacing market growth and that’s good.”
A major driver of success in the six months has been Floquet’s focus on the higher-end of Remy’s product offering. Under her guidance, the company has moved away from cheaper brands, and started focussing on ‘premium’ spirits. That class of drinks come with price tags that start at $50 per bottle, but can climb into the thousands (Remy Martin Louis XIII Origin 1874, for example, is retailing for £5,214.55). According to Floquet: “this has already begun yielding very positive results last year […] it’s even more the case this year.”
Dominion holds Remy Cointreau in its Global Trends Luxury Fund.
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