* Q3 cognac sales up 19.4% like-for-like vs estimate 14.9%
* Keeps forecast for 'very strong growth' in FY organic
* 'Cautiously optimistic' on Chinese New Year, shares down
PARIS, Jan 25 (Reuters) - Remy Cointreau is
confident demand for its premium cognac in China, the United
States and Europe will underpin profit growth this year after
the French spirits group beat third-quarter sales forecasts.
The maker of Remy Martin cognac and Cointreau liquor was
slightly more cautious, however, on prospects for Chinese New
Year celebrations next month due to COVID restrictions, and its
shares reversed earlier gains to trade down 1.6% by midday.
"We are optimistic on Chinese New year but a little more
cautious than we were two months ago. It will be a solid 2022
Chinese New Year though not the best ever for the industry,"
Finance Chief Luca Marotta told analysts.
Remy is banking on its Club cognac in particular to win
market share in China, he added.
The pandemic has helped Remy's drive towards higher-priced
spirits to boost profit margins long term, accelerating a shift
towards premium drinks, at-home consumption, cocktails and
Group sales for the three months to Dec. 31 came in at 440.5
million euros ($498.1 million), an organic rise of 21%, beating
a company-compiled consensus from 18 analysts for a 15.1% rise.
Sales at the Remy Martin cognac division, which makes 90% of
group profits, rose 19.4% to 332.7 million euros, also above
analysts' estimates of 14.9%.
The company said the third-quarter performance reflected
double-digit sales growth in China, led by Club cognac and
strong e-commerce sales during the Singles' Day online shopping
Cognac demand in the United States also remained strong,
with high-end brands such as Louis XIII cognac that sells for
more than $2,000 a bottle, Remy Martin XO and 1738 Accor Royal
For the full 2021/22 year, Remy kept a forecast of "very
strong" organic growth in current operating profit and strong
organic sales growth, and reiterated it was confident in its
ability to outperform the premium spirits market.
Marotta told analysts that consensus forecasts for 2021-22
organic current operating profit growth of 38% and sales growth
of 26.5% were "at the right level."
Due to higher marketing and communication spending and a
tougher comparison base in the second half, full-year profits
will be driven solely by first-half growth, the group reiterated
The French company's fiscal year starts on April 1 and ends
on March 31.
($1 = 0.8843 euros)
(Reporting by Dominique Vidalon
Editing by Jane Merriman and Mark Potter)