Rémy Cointreau has reported a far smaller-than-expected fall in fourth-quarter sales, saying "significant growth" in China helped drive performance at its cognac division well above analysts' expectations.
Rémy Cointreau, which makes over 70% of its sales from cognacs such as Rémy Martin, has been grappling with difficult conditions in its two major markets, China and the United States, forcing it to cut its full-year forecast in October.
Analysts had been expecting it to post a 3.4% decline in organic sales in the three months to end-March, with flat cognac sales at 0.5%. Instead, organic cognac sales grew 15.4%, bringing the group-level sales decline to just 0.7%.
'Excellent' China Performance
The spirits maker attributed the result to an 'excellent' performance in China, where it said it was helped by favourable phasing effects and numerous marketing initiatives aimed at boosting sales during the Lunar New Year festivities in February.
However, problems in the United States continued. U.S. retailers and wholesalers have been cutting expensive booze from their inventories as extraordinary sales in the aftermath of COVID-19 have faded.
''In the United States, sales were once again penalised by an adverse environment and an intensely promotional market,' it said.
'In this context, the Group faced continued deterioration in value depletions and pursued destocking while maintaining a firm pricing policy in keeping with its strategy of long-term value.'
The EMEA region, meanwhile, turned in a 'strong performance driven by good momentum in the Africa/Middle East region and in Western Europe'.
'Major Destocking'
Rémy Cointreau said it saw more 'major destocking' in the quarter, amplified by phasing effects and more intense promotions from competitors.
Overall, full-year sales in the Americas were down 39.6% as a result, versus 2% growth in Asia Pacific and 0.7% growth in Europe.
Group organic sales for the year stood at €1.19 billion, a 19.2% decline versus a year earlier and slightly ahead of analyst estimates.
