French spirits group Rémy Cointreau predicted on Thursday that its current operating profit for the year would be flat because of a weaker-than-expected first-half after protests in Hong Kong and promotional spending hit earnings.
The weak results come as chief executive Valerie Chapoulaud-Floquet, the architect of Rémy-Cointreau's push towards higher-priced spirits to drive profit margins, will be replaced on 1 December by Richemont's Eric Vallat.
The French company, which cited an uncertain geopolitical climate, kept its medium term outlook, reiterating its aim to generate 60%-65% of its turnover from spirits sold at $50 a bottle or more and its ambition to become "the world leader in exceptional spirits".
First-Half Results
Group current operating profit for the six months to 30 September reached €138.3 million ($152.4 million), compared with a company-compiled consensus from 15 analysts who forecast current operating profit of €143.3 million.
Operating profit at the Rémy Martin cognac division, reached €126.9 million in the first half. This marked a like-for-like rise of 0.9%, below analysts expectations for 1.4% growth.
This reflected good demand for cognac in China but a fall in tourism in Hong Kong due to political protests and slower-than-anticipated cognac stock replenishment by US retailers.
Rémy Cointreau group sales fell an already reported 3.6% in the first half on a like-for-like basis.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
