Rémy Cointreau SA shares rose the most in almost two years after the French distiller reported third-quarter sales that beat analysts’ estimates on a surge in Rémy Martin cognac shipments ahead of Chinese New Year festivities.
The stock surged as much as 10% to €90 in Paris, the steepest intraday advance since April 2014. Revenue from the company’s Rémy Martin unit rose 22% on an organic basis in the three months through December. Analysts expected 8.8% growth. Total sales rose 9% on the same basis, beating the 4.2% consensus.
"The headlines and underlying performance certainly impress," Jonathan Fyfe, an analyst at Mirabaud, said in a note.
Chinese retailers have been stocking up on cognac to prepare for a New Year that takes place earlier this year. Sales in that market have been gradually improving, ending a slump caused by a five-year government crackdown on graft. The maker of Bruichladdich whisky joins other purveyors of high-end goods such as fashion house Burberry Group Plc and Cartier owner Richemont in seeing demand rebound in China.
Excluding the effect of the earlier New Year celebration, Rémy Martin’s sales growth would have been 19%, Jean Letzelter, an analyst at Exane BNP Paribas, wrote in a note. Beyond China, the company said Russian cognac sales returned to "robust growth" while the Americas saw "strong momentum."
The Paris-based distiller also confirmed its forecast for growth in full-year operating profit, excluding currency effects.
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