LONDON (Reuters) – Rémy Cointreau on Wednesday reported a 15.6% drop in first-quarter sales, beating expectations as difficulties facing its U.S. cognac unit spread to its liqueurs and spirits unit.
Analysts had expected organic sales at the company, which makes Rémy Martin cognac and Cointreau, to fall 13.6%.
Rémy Martin has warned that first-half results could be difficult due to ongoing problems in the United States and a sluggish economy in China, its two main cognac markets. Cognac accounts for about 70% of Rémy Martin’s sales.
However, the Cognac unit outperformed analysts’ expectations, falling 12.2% organically versus analysts’ forecasts of 17.4%.
However, Rémy Martin’s liqueurs and spirits division suffered a 20.4% decline, more than double analysts’ expectations for a 8.2% decline. The store carries brands such as Cointreau, The Botanist gin and Bruichladdich whiskey.
It attributed the decline to significant destocking in the United States, where wholesalers and retailers have also been reducing inventories of Rémy Martin cognac, hurting its performance.
The company kept its full-year guidance unchanged.
