Rémy Cointreau has reported a stronger-than-expected 27.2% organic jump in first-half operating profit, driven by strong demand for its premium cognac in China and the United States and cost controls.
For the full year of 2022/23, the maker of Rémy Martin cognac and Cointreau liqueur reiterated it expected another year of strong organic sales growth, with the second half set to reflect a return to normal consumption trends after two years of 'exceptional growth'.
As Rémy Cointreau continues to invest in marketing and communications particularly in the second half of the year, current operating profit margin will be driven by gross margin resilience despite an inflationary environment and tight control of cost overheads, the statement said.
"In a persistently tough and demanding environment, we are fortunate to be ahead of schedule with our strategic plan," said Eric Vallat, Rémy Cointreau chief executive.
Operating Profit Gain
Group current operating profit for the six months to September 30 reached €319.3 million, marking an organic rise of 27.2%.
That outperformed a company-compiled consensus of 22 analysts that forecast current operating profit of €306 million, up 23.8% like-for-like.
Rémy Cointreau's fiscal year starts on April 1 and ends on March 31.
The company also remained confident of its ability to gain market share in the exceptional spirits market as it takes advantage of new consumption trends.
The pandemic has accelerated Rémy Cointreau's long-term drive towards higher-priced spirits to boost profit margins, speeding a shift towards premium drinks, cocktails and e-commerce as people drank more expensive drinks at home.
Operating profit at the Rémy Martin cognac division, which makes nearly 90% of group profit, totalled €299.7 million in the first half, marking an organic rise of 35.7%.
Rémy Cointreau had already reported a 21.1% organic jump in first-half sales, boosted by a recovery in demand for its top cognac brands in China during the Mid-Autumn festival in a market still impacted by stop and start COVID restrictions.