French spirits group Rémy Cointreau beat third-quarter sales forecasts and said it was confident that demand for its premium cognac in China, the United States and Europe would underpin profit growth this year.
For the 2021/22 full year, Rémy Cointreau kept a forecast of 'very strong' organic growth in current operating profit and strong organic sales growth, and reiterated it was confident in its ability to outperform the premium spirits market.
For the three months to 31 December, group sales came in at €440.5 million ($498.1 million), an organic rise of 21%.
That beat a company-compiled consensus from 18 analysts for €415.6 million.
Sales at the Rémy Martin cognac division, which makes 90% of the group profits, rose 19.4% to €332.7 million, also above analysts' estimates of €317.7 million.
The group said the third quarter performance reflected "remarkable" sales growth in China led by demand for its Club cognac, strong e-commerce sales during the Singles' Day online shopping bonanza and demand ahead of the Chinese New Year that starts on 1 February.
Cognac Demand Increases
Cognac demand in the United States also remained strong in the third quarter, with high-end brands such as Louis XIII cognac that sells for over $2000 a bottle, Rémy Martin XO and 1738 Accor Royal outperforming.
The COVID-19 pandemic has boosted Rémy Cointreau's drive towards higher-priced spirits to boost profit margins long term, accelerating a shift among consumers towards premium drinks, at-home consumption, cocktails and e-commerce.
Due to higher marketing and communication spending and a tougher comparison base in the second half, full-year profits will be driven solely by first-half growth, the group reiterated.
The French company's fiscal year starts on 1 April and ends on 31 March.
News by Reuters edited by Donna Ahern, Checkout. For more Drinks stories click here. Click subscribe to sign up for the Checkout print edition.