Remy Cointreau SA’s second-quarter sales rose 4.2%, exceeding the 3.2% analysts had expected. Growth was driven by a rebound in Asian Cognac demand, particularly in China following accelerated shipments ahead of the Mid-Autumn Festival. The broader liqueurs and spirits division missed expectations.
The French company also expects a lower tariff impact for the rest of the year — €5 million on operating profit, compared to €20 million previously. Sales in America fell due to a high base of comparison and destocking in the US following changes in distribution. Demand in Africa and the UK showed improvement, but subdued consumer trends continued to weigh on the rest of Europe.
Drinks makers are adapting to weakening demand, particularly in the US, due to higher everyday costs and health-conscious consumers cutting back on alcohol. Remy Cointreau has also been recovering from a trade spat between the EU and China last year, when Beijing imposed significant levies on brandy — mostly on Cognac. CEO Franck Marilly has been reviewing Remy’s portfolio and said in June that no part of the business would avoid scrutiny, raising the prospect of more dealmaking.
Brown-Forman Corp., the maker of Jack Daniel’s, has held merger talks with both Jameson whiskey owner Pernod Ricard SA and Sazerac Co., which makes Southern Comfort. The discussions have not led to a deal.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing