Rémy Cointreau expects a 45% to 50% fall in mid-year operating profit, but anticipates a strong recovery in the second half, driven by China and the United States, the French spirits company said on Thursday.
The maker of Rémy Martin cognac flagged more favourable spirits consumption trends in the United States in the past few weeks and new boss Eric Vallat vowed to pursue the group's push towards higher-priced spirits to boost margins, setting new medium-term targets.
"In an uncertain public health, economic and geopolitical environment, the Rémy Cointreau group remains confident of its ability to emerge stronger from the crisis," the statement said.
The company forecast a fall in first-quarter sales of around 45%, smaller than previous guidance of 50% to 55%, and a "more moderate decline" in the second quarter.
Rémy's 2020/21 fiscal year started on April 1.
Operating Profits
Rémy also reported a well-flagged 22% fall in like-for-like current operating profit for the fiscal 2019/20 year that ended March 31, reflecting weaker sales and higher costs.
Operating profit of €215.1 million was a little better than the €209.2 million forecast by analysts.
Its operating profit margin fell to 21% of sales from 23.5%.
Eric Vallat took over as CEO in December 2019 from Valerie Chapoulaud-Floquet, architect of Rémy's push towards higher-priced spirits.
On Thursday Rémy Cointreau reiterated its goal to become a "leader in exceptional spirits" while also building a business model more focused on sustainability.
The group now targets a gross margin of 72% and an operating margin of 33% by 2030.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
