Shares in French liquor maker Remy Cointreau (REMYY) rose Thursday after it said premium products lifted first-half profit by almost 15% amid gains in Greater China and the U.S.
The stock was up almost 2% at €75.80 on news first-half net profit rose 14.8% to €76 million ($80.3 million), while operating profit climbed 15.9% to €123.9 million on the back of a strong performance by the group's Rémy Martin, Cointreau, Metaxa and Islay Spirits brands. Its operating profit beat a company-compiled consensus for profit of €119 million.
As previously announced, first-half sales rose 2.5% to €513.4 million, which was better than analysts' forecasts at the time. Remy said China "is becoming a growth driver in Cointreau, " while U.S. demand for the drink remained strong. "Solid momentum" in the U.S. continued for its Remy Martin cognac, while Chinese cognac sales returned to growth.
Russian sales of Metaxa are "rallying," while Russian sales of Remy Martin increased.
It doesn't break down sales by region.
Rémy Cointreau reiterated that it "anticipates growth in current operating profit over financial year 2016-17, assuming constant exchange rates and consolidation scope."
"Remy is well-placed to benefit from the global premiumization trend in spirits. China may be turning the corner at last," noted Liberum analysts, who nevertheless rate the stock only as a hold because of a "rich" valuation.
The bulletin provides further evidence that spirits groups and luxury goods makers are rebounding from a Chinese austerity drive, which started in 2014 and included a clampdown on gift-giving to government employees. Fashion house Burberry (BURBY) is among other companies to have reported progress in that market in recent months.