Spirits maker Remy Cointreau SA (REMYY)  said first half sales rose 7%, while profit climbed 11.8%, but saw its shares fall THhursday as investors took a glass-half-empty view of results that suffered from comparison with rivals.

The maker of Remy Martin cognac posted consolidated sales of €544 million and current operating profit of €134 million, on an operating margin of 24.6%, up 1.1% year-on-year, as its strategy of focusing on selling more expensive bottle paid dividends.

The increased margin came at a cost, as spending on promotion doubled, leading to a 17.5% decline in organic current operating profit at its Liqueurs & Spirits division, which fell to €22.5 million. House of Remy, the maker of its cognac brands, posted operating profit of €119.9 million, up 17.6%, driven by rebounding in demand in China and strong U.S. sales.

"The headline operating profit was 2% below consensus, organic operating profit growth was in-line with consensus expectations, and importantly, the Cognac division delivered organic operating profit growth that was 160 basis points ahead of consensus," noted Goldman Sachs. "With the most important divisions beating and brand investment continuing we see this as a high-quality way of delivering in-line results."

The markets took a more pessimistic view of the figures, sending Remy shares down 3% to €107.9. The stock has gained about a third since the start of the year buoyed by a rebound in luxury sector sales in Asian markets and notably China.

Remy's performance also suffered by comparison with its rivals. Pernod Ricard (PDRDY) in October blew away forecasts when it posted a 5.7% increase in organic sales, against a forecast consensus of 3.4%.

Remy confirmed its full year guidance of "growth in current operating profit" at constant exchange rates.

Remy trades at a price/earnings ratio of about 28.2 times for the current year, an about 44% premium to the European Staples sector, and almost 35 times its expected 2018 earnings.

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Editors' pick: Originally published Nov. 23.

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