Spirits maker Rémy Cointreau said it is anticipating organic growth of around 10% in operating profit in the 2020/21 fiscal year, after strong demand in the United States and China for its premium cognac lifted fourth quarter sales by 15.1%.
'This performance demonstrates the group’s resilience amid the COVID-19 pandemic," Rémy Cointreau said in a statement. 'After declining in the first half of the year, business bounced back strongly in the second half, including +15.1% organic growth in the fourth quarter.'
A Strong Start
The maker of Rémy Martin cognac and Cointreau liqueur also anticipated a strong start to 2021/22, citing a favourable comparison, shipment phasing benefits and more buoyant consumer trends in the United States.
The 10% profit growth guidance -- which would mark a rebound from a 22% fall in group profit in the full year 2019/20 -- exceeds current analysts' expectations of a 7.6% profit rise.
'In a still uncertain public health, economic and geopolitical environment, the Rémy Cointreau Group remains confident of its ability to emerge stronger from the crisis', it said.
'The group is expecting a strong start to financial year 2021/22 supported by a very favourable base of comparison, shipment phasing benefits, and structurally more buoyant consumer trends in the United States.'
It also echoes an upbeat profit forecast by larger rival Pernod Ricard on Thursday.
Spirits Performance
Sales for the three months to March 31 came in at €229.4 million, marking a like-for-like rise of 15.1%, which compared with analysts' expectations for 15.9%.
Cognac sales alone stood at €162.5 million - a like-for-like rise of 18.2%, which notably reflected an "excellent" performance during the Chinese New Year celebrations.
Cognac demand in the United States remained strong, boosted by at-home consumption, albeit somewhat moderated by the group's previously announced decision to manage its strategic inventories.
Foreign exchange and the effects of acquisitions and divestments would impact operating profit in full-year 2020/21 by €5 million and €2 million respectively, Rémy Cointreau said.
Rémy Cointreau's fiscal year starts on April 1 and ends on March 31. [Pic: ©Monticello/123RF.COM]
News by Reuters, edited by ESM. For more Drinks news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
