The cognac revival in China is gaining steam.
Looking past a five-year government crackdown on corruption that had dented sales of the spirit, Remy Cointreau is back to keeping the nation awash with brands such as Remy Martin, which drove third-quarter sales growth that surpassed analysts’ estimates.
The stock rose as much as 1.7% to €112.50 in early Paris trading.
Revenue from its cognac arm rose 5.5% on an organic basis in the three months through December, the Paris-based distiller said in a statement Friday. Analysts on average expected 4.5% growth.
The increase would have been even stronger if not for the high basis of comparison for last year’s quarter and the late timing of the 2018 Lunar New Year, Remy Cointreau said. Adjusted for those effects, the company said organic growth for the quarter would have been around 6%.
Positioning itself as a purveyor of luxury items under the leadership of Chief Executive Officer Valerie Chapoulaud-Floquet, Remy Cointreau has also discontinued low-end variants of its rum and triple-sec brands to focus on products such as Louis XIII, a $2,700 blend of 1,200 cognacs aged more than 40 years.
Total sales rose 3.2% on an organic basis, beating the 3% average estimate Remy Cointreau confirmed its forecast for growth in full-year operating profit, excluding currency effects.
The company also benefited from solid growth in the US, Russia, Central Europe, Africa and the UK.