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.

Key Insights

• 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.

Market Reaction

• 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.

Get More

• For more on Remy Cointreau’s numbers, click here.
• For the statement, click here.

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, John Bowker

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