Investing.com - Remy Cointreau (EPA:RCOP) on Wednesday reported second-quarter sales that exceeded analyst expectations, driven by strong cognac performance in Asia-Pacific, though its liqueurs business continued to face headwinds from U.S. distribution changes.
The company's shares fell 4% in Paris trading as investors remained cautious about the strength of Remy's recovery.
The French spirits maker posted organic sales growth of 4.2% in the second quarter ended September, beating the analyst consensus of 3.6%. Total sales reached €287.7 million, compared to the consensus estimate of €280.8 million. For the first half, organic sales rose 2.9%, reaching €510.9 million, up from €489.6 million in the prior-year period, representing a 4.4% increase on a reported basis.
The cognac division delivered organic growth of 12.4% in the second quarter, surpassing the analyst estimate of 8.9%. Growth was driven primarily by accelerated shipments to China ahead of the Mid-Autumn Festival and continued momentum across the rest of Asia. The liqueurs and spirits division declined 7.4% organically in the second quarter, missing the consensus estimate of a 4.7% decline, as sales were affected by destocking in the U.S. following distribution changes.
"The Group's objective of achieving a slight organic improvement in Current Operating Margin is thus unchanged," the company stated, while noting that approximately €15 million in tariff savings would be fully reinvested to support growth.
Rémy Cointreau revised its tariff impact estimate to approximately €5 million on current operating profit, down from €20 million previously. The reduction reflects lower U.S. tariffs on European imports, which fell to 10% from 15%, and €6.4 million in tariff refunds relating to fiscal 2025-26 recognized in the first half.
The company also updated its currency impact forecast, now expecting a positive effect of around €15 million on sales and between €3 million and €5 million on current operating profit, compared to previous estimates of negative €15 million and negative €5 million to €8 million, respectively.
For the full fiscal year 2026-27, Rémy Cointreau (EURONEXT:RCO) confirmed its guidance for a return to sustainable organic sales growth, with momentum expected to strengthen progressively throughout the year. The company aims to maintain leverage below 3.5 times net debt to EBITDA at March 31, 2027.
On September 30, Rémy Cointreau completed its inaugural €250 million hybrid bond issue with a 6.75% fixed coupon, which will be recognized entirely as equity.
Vahid Karaahmetovic contributed to this report.
Original Article
Rémy Cointreau sales beat estimates on cognac strength but shares fall
