The Paris-based maker of Remy Martin cognac and Cointreau liqueur, which posted better-than-expected sales in its second quarter ending Sept. 30, said it was confident the key U.S. and mainland China markets would fuel a strong rebound in the second half of its 2020/2021 financial year.
Finance Chief Luca Marotta told analysts U.S. demand for premium cognac, tequila and single malt whisky was benefiting as "people spend less on travel and leisure outdoors and want to upgrade inside their home."
He said a U.S. campaign to attract new customers with a focus on pairing cocktails with barbecue occasions at home was achieving "excellent results".
The group teamed up with a chef to propose barbecue cocktail recipes using Remy Martin, VSOP or 1738 Accord Royal cognac.
Second quarter sales reached 280.8 million euros ($330.8 million), down 4% at constant exchange rates and excluding the effect of acquisitions or disposals.
But it still beat forecasts for a 5.9% fall in the second quarter following a 33.2% slump in the April-to-June period.
Cognac sales, which make up 74% of group sales, fell 2.5% in the second quarter, less than the 4.9% slide forecast.
The spirits maker expects current operating profit for the six months to Sept. 30 to be down 25% to 30% on a like-for-like basis, against a drop of 35% to 40% forecast in July.
U.S. and Mainland China saw double-digit sales growth in the second quarter, with Remy Martin cognac and Scottish single malt whiskies in strong demand.
Remy Cointreau shares rose by over 3% in early trade before erasing gains to trade down 2% at 154.1 euros by 1006 GMT.
"The worst appears to be behind and H2 should improve with shipment catch-up and benefit of pricing," Jefferies analysts said in a note, adding that the good news in the United States and China "both in the near term and longer term priced in."
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Sherry Jacob-Phillips)
By Dominique Vidalon