(Reuters) -Shares in Remy Cointreau jumped 13% on Friday after the French spirits maker beat third-quarter sales expectations, citing a relative improvement in the United States where it has struggled with high levels of unsold stock.
However, the group also said its annual sales decline would likely be at the lower end of its guidance range of 15% to 20%.
Remy was forced to cut its full-year guidance in October amid falling U.S.
sales following a post-COVID boom, leaving wholesalers and retailers there with high inventories. Sales growth in China also lagged expectations amid a tough economy.
On Friday, it said it saw a significant improvement in the U.S.
from the previous quarter, but reiterated it did not expect sales to return to growth before the 2024/25 financial year.
Full-year sales growth in China would be tempered by a slower than expected economic recovery, it added.
Remy had already flagged sharp destocking in the country in the quarter ahead of the Chinese New Year in February, which chief financial officer Luca Marotta said was temporary.
However, he added that underlying performance in the United States and China – the group’s two key markets for coganc – was close to Remy’s most cautious scenario.
Jefferies analyst Edward Mundy said in a note that “key questions” remained about the duration of destocking in China and a return to normality in the United States, but the improvement and reiteration of guidance was well-received.
Remy said its sales dropped by 23.5% on an organic basis to 319.9 million euros ($346.7 million) in the third quarter.
Sales of cognac, which makes up most of Remy’s revenues, were down 33.9%, also ahead of analyst expectations.
($1 = 0.9227 euros)
(Reporting by Diana Mandiá in Gdansk and Emma Rumney in LondonEditing by Milla Nissi and Mark Potter)
