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Cognac supply issues hit in Q3 as Moet Hennessy 2017 growth slows - results

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  • YTD 2017 sales climb by 8% in organic terms to EUR3.51bn (US$4.12bn)
  • Sales in three months to end of September come in flat, dipping 0.4% to EUR1.2bn

Moet Hennessy has posted flat sales in the third quarter of 2017, with the stronger numbers from the first two quarters keeping the unit's top-line in the black.

LVMHs Moet Hennessy unit saw its Cognac warnings come to life in the third quarter

LVMH's Moet Hennessy unit saw its Cognac warnings come to life in the third quarter

After the close of trading yesterday, parent LVMH said the wine and spirits division saw sales in the three months to the end of September slip slightly, by 0.4%. The performance compares to a 13% rise in sales in the first quarter and a 10% increase in Q2.

Year-to-date sales for the division in organic terms were up by 8%, with reported sales rising by 7%.

The group credited its Champagne business, which posted a nine-month volumes rise of 8% "with particularly strong demand in Europe and Japan". While the Hennessy Cognac portfolio increased volumes in the year-to-date by 9%, the brand's Q3 volumes were down by an unspecified percentage, due to what Moet Hennessy termed "supply constraints".

The numbers back up the unit's warnings earlier this year that Cognac stock would be an issue in 2017. In the first-quarter results announced in April, Moet Hennessy said: "Hennessy Cognac saw volumes increase significantly which could impact the availability of stocks for the rest of the year." Three months later, the division went further, saying it was expecting a "slowdown" in volumes growth for Cognac in the second half, "given the existing supply constraints".

To read LVMH's Q3 and YTD results announcement, click here.

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Sectors: Company results, Spirits, Wine

Companies: LVMH Group

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