French spirits group Rémy Cointreau posted a worse-than-expected 11.3% fall in third quarter like-for-like revenues, as demand for cognac in Hong Kong was impacted by protests in the region.
Slow stock replenishment in the United States also impacted Rémy's third quarter performance.
These negative factors more than offset a stronger performance in mainland China, where the Lunar New Year, a crucial moment for the drinks industry in that country, starts on Jan. 25.
This year's event will, however, take place amid rising worries over a coronavirus outbreak in the country.
Group sales reached €290.2 million in the three months to Dec. 31, showing a like-for-like decline of 11.3%. This compared with average expectations for a 6% decline in a company-compiled poll of 16 analysts.
Cognac sales alone fell 7.6%, worse than analysts' expectations for a 2.3% decline.
In December, Richemont's Eric Vallat replaced Valerie Chapoulaud-Floquet as Rémy CEO. Chapoulaud-Floquet had been the architect of Rémy's push towards higher-priced spirits to drive profit margins.
The publication of the annual 2019/20 results on June 4 will be the occasion to provide a new strategic roadmap, added Rémy.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.