At the end of the 1st quarter of the current fiscal year, the second largest producer of alcohol in France, Remy Cointreau SA, increased its revenues by 3.9%, yet in organic terms, the company recorded a decrease in sales which was worse than market expectations.
However, the company still provides a positive earnings outlook for the current year as a whole.
According to the report of Remy Cointreau, revenues for the three months ended June 30 rose to 223.3 million euro from 214.8 million euro in the same period of 2014, with the consensus forecast of experts polled by Thomson Reuters, of 235 million euro.
In China, there is still a low demand for cognacs, amid the fight against corruption. In addition, the company's results are negatively affected by changes in the distribution network. However, the weakening of the euro gives a positive impulse to Remy Cointreau sales outside the euro zone.
The organic decline in revenue (cleared of the impact of mergers and acquisitions, divestitures and exchange rate fluctuations) was 9%, while analysts polled by Bloomberg, had expected a decline of 5.4%.
Remy Cointreau notes a sales growth in Western Europe and increased demand for the most expensive drinks from its range in the United States.
Sales of Remy Martin cognac fell 6.7% in April-June, and other spirits and liqueurs - by 13.8%.
In the current financial year, Remy Cointreau still expects organic growth in revenues and operating profit.
Remy Cointreau shares fell during the trading session in Paris on Tuesday by 2.5%. Since the beginning of 2015, the company's capitalization increased by 21.5% , to 3.28 billion euro.
The French Remy Cointreau, controlled by Eriar Dubreuil family, was formed in 1991 through the merger of Remy Martin (founded in 1724) and Cointreau (founded in 1849). The company produces cognac Remy Martin, rum Mount Gay, brandy Metaxa, champagnes like Piper-Heidsiek, Charles Heidsiek and F.Bonnet, liqueur Cointreau and Passoa, and more.