Remy Cointreau first-half sales hurt by China slowdown
Spirit-maker Remy Cointreau on Thursday said sales in the first half of the year slumped 15.5 percent, hit by a slowdown in China as part of a government anti-corruption and frugality drive.
The French alcohol maker said group sales in the six months to the end of September dropped to 471.8 million euros ($601.1 million), down from 558 million euros a year earlier.
"Asia-Pacific remained adversely affected by the continued destocking in China," the company said in a statement.
Remy Cointreau, like many of France's luxury brands, has suffered from a slowdown in sales due to a corruption clampdown on ostentatious business entertainment and gift-giving in the world's second-largest economy.
Sales of its flagship Remy Martin cognac, which accounts for around half of its business, were hit by "destocking in Asia and a complex macro-economic environment in Western Europe," where economic growth has been stagnating.
On an organic basis, which strips out currency moves, acquisitions and disposals sales fell by 5.6 percent, the company said.
The fall in profit was in-line with analyst expectations. Brokerage Aurel BGC noted the second quarter showed "an improvement, but the numbers remain degraded, unsurprisingly due to China".
Remy Cointreau confirmed its overall targets for the 2014-15 financial year "of delivering positive organic growth in both sales and current operating profit".
The news weighed on the company shares, which dropped 1.45 percent to 51.19 euros in Paris, against an overall 2.10 percent drop in the broader CAC 40 index.
© 2014 AFP