Remy Cointreau Confirms Guidance As Revenue Rises
04/24/2012| 02:38am US/Eastern
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French spirits company Remy Cointreau SA (>> REMY COINTREAU) Tuesday said it expects to meet its profit forecasts for the fiscal year from April 2011 to March 2012, as it posted a 13% increase in full-year revenue, boosted by robust growth in Asia.
Remy Cointreau confirmed that it expects a substantial increase in net profit in 2012 and a double-digit increase in operating profit.
Full-year revenue climbed to EUR1.03 billion from EUR908 million a year earlier, as cognac sales--which account for over 50% of annual revenue--continued to grow strongly. The figure met analysts' expectations, which had called for EUR1.03 billion in revenue, according to FactSet.
The company, whose brands include Remy Martin cognac and Mount Gay rum, said sales in the fiscal fourth quarter fell 8.3%, as sales related to the Chinese New Year were registered mainly in the third quarter.
The company said it will keep on investing in markets with strong growth potential.
In fiscal 2011, Remy Cointreau's net profit fell 18% from a year earlier to EUR70.5 million, dragged down by a write-down on the value of its Greek brand Metaxa. Analysts expect the company to record a net profit of EUR122 million in fiscal 2012, according to FactSet.
The beverage company's sales figures echo upbeat comments made last week by French luxury giant LVMH Moet Hennessy Louis Vuitton SA (>> LVMH), which said its cognac sales had made "an excellent start to the year," posting volume growth of 9% in the first quarter of 2012.
French peer Pernod Ricard SA (>> PERNOD RICARD) will release its third-quarter sales update Thursday before the market open.
Like that of its rivals, Remy Cointreau's growth has been driven by emerging markets, where demand for premium drinks is being fueled by rising incomes. The company has also said repeatedly that it could spend up to EUR1 billion on new premium spirit brands, possibly an upmarket whisky that is popular in China.
Over the past six months, Remy Cointreau shares have risen nearly 35%, considerably outpacing France's CAC-40, which has fallen close to 2%. Investors have favored the stock in recent months due to its strong exposure to the cognac industry, which benefits from limited high-end products and rising demand in Asia.
Remy Cointreau shares closed Monday at EUR78.44.
-By Nadya Masidlover, Dow Jones Newswires; +33 1 4017 1740; nadya.masidlover@dowjones.com
(Inti Landauro contributed the article.)
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