Rémy Cointreau Sees Flat Current Operating Profit After Weak First Half
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".
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.