Rémy Cointreau sales boosted by China in first half
French luxury spirits group Rémy Cointreau reported first half results on Thursday that demonstrated a strong demand for its higher priced drinks in China, driving the company’s performance. The group said that operating profit for the period rose by 11.8% against the first half of 2016 – this is a touch below expectations, but Rémy maintained its forecast for growth at constant exchange rates. Rémy’s share price dropped a few percentage points on the news, but has already started trending up again.
Rémys Cointreau’s share price has risen by 37% so far this year
SOURCE: Yahoo Finance
Rémy is seeing a strong rebound in its U.S. and China divisions, fuelling growth as it focuses on selling its higher priced spirits – typically at $50-plus per bottle, but going all the way up to its $3,000 per bottle Louis XIII cognac. The company is particularly pushing these bottles in China, where appetites are rising, helping to offset the impact of President Xi Jingping’s anti-corruption crackdown on gift giving.
The Company’s CEO, Valérie Chapoulaud-Flouquet, described the six-month period as “somewhat unusual” saying it was “fairly atypical compared to previous similar periods” but that it was “especially positive” nonetheless.
On the company’s earnings call, chief financial officer Luca Marotta explained how Rémy plans to invest in its brands:
“Now to be more specific, I'd say that after 2 years of streamlining our advertising and promotional expenses, and also of productivity gains, the overall budget has once again grown. The aim being to take advantage of the growth in sales to step up strategic investments – medium and long-term strategic – in our brands. These investment efforts will go on so as to support this medium-term strategic vision. It will be done in a reasoned and reasonable manner without destabilizing our operating margin growth objectives.”
Dominion holds Rémy Cointreau in its Global Trends Luxury Fund.
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