The French wines and spirits group, Remy Cointreau, posted sales of €799.1m ($856.9m) for the nine months to the end of December 2002, representing an increase of 1.2% from €789.3m in the corresponding period in 2001.
The group confirmed its forecast for the full 2002/03 fiscal year, predicting an operating margin in excess of 20% of turnover and organic year-on-year sales growth of between 5% and 6%.
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However, the nine-month sales figure came in below most analysts’ forecasts which had been for turnover in excess of €800m. Remy said that the sales figures had been adversely affected by currency fluctuations. It said that sales excluding the effects of currency rate changes grew by 5.7% to €834.6m.
Stuart Price, analyst at WestLB Panmure, said that while the sales results were in line with its forecasts, it remained concerned about the sustainability of the growth. “The bulls on the stock and the spirits sector will be pointing to the US depletions in Cognac – up 7% in Q3 – and Champagne (up 23.6%). However, Remy’s position in the luxury sector means that we have concerns about the sustainability of this growth and the pricing strength,” Price said. He added that although the stock appears under-valued “the political and economic uncertainties in the USA and the Gulf suggests that the stock should under-perform.”
Third quarter sales rose by 8.6%, Remy reported, with most of the growth stemming from a strong performance from vodka sales in Poland and its Champagne operations. It also reported that Champagne sales rose by 24% in the first nine months to €111.3m but Cognac sales were slower, growing by 1.5% at constant currencies to €286.3m.
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