LONDON, April 26 (Reuters) -

Remy Cointreau reported a far smaller-than-expected fall in fourth-quarter sales on Friday, saying "significant growth" in China helped drive performance at its cognac division well above analysts' expectations.

Remy, which makes over 70% of its sales from cognacs such as Remy Martin, has been grappling with difficult conditions in its two major markets, China and the United States, forcing it to

cut

its full-year forecast in October.

Analysts had been expecting it to post a 3.4% decline in organic sales in the fourth quarter, with flat cognac sales at 0.5%. Instead, organic cognac sales grew 15.4%, bringing the group-level sales decline to just 0.7%.

The company attributed the result to an "excellent" performance in China, where it said it was helped by favourable phasing effects and had implemented numerous marketing initiatives aimed at boosting sales during the Lunar New Year festivities in February.

However, problems in the United States, where retailers and wholesalers have been cutting expensive booze inventories, continued. Remy said it saw more major destocking in the quarter amid more intense promotions from competitors.

Remy maintained its full-year guidance and confirmed it expected to achieve 100 million euros ($107.23 million) of annual savings via a cost-cutting plan, delivering a "contained decrease" in its current operating margin for the year. (Reporting by Emma Rumney; Editing by Jamie Freed)