Remy Cointreau Earnings Beat Estimate on Shift to Higher-End
(Bloomberg) -- Remy Cointreau SA earnings beat analysts’ estimates as the cognac maker’s shift toward higher-end spirits fueled sales growth.
- Current operating profit rose 10 percent on an organic basis to 138 million euros ($157 million) in the first half, beating the 132 million-euro analyst estimate.
- While it’s a headline beat, there are a lot of moving parts. The gross margin widened by almost 1 percentage point thanks to sales momentum and cost control, though currency shifts eroded those gains when you get down to the operating margin.
- Improvements in profitability are down to Chief Executive Officer Valerie Chapoulaud-Floquet’s focus on high-end products. The company has shifted away from cheap brands such as Passoa passion fruit liqueur, which sells for about $15 a bottle, to prioritize cognacs and other drinks selling for $50 a bottle or more.
- Remy Cointreau shares rose as much as 0.7 percent in early trading. They have fallen 9 percent this year, heading toward the first annual decline since 2014.
- For more on Remy Cointreau’s numbers, click here.
- For the statement, click here.
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