PARIS (Reuters) - French spirits group Remy Cointreau’s (RCOP.PA) first-half profits came in slightly short of forecasts on Thursday, knocking its shares off record highs.
Remy’s first-half current operating profit rose 11.8 percent on a like-for-like basis to 134.1 million euros (119.41 million pounds) , slightly below a consensus forecast of 137.3 million euros. It maintained its forecast for growth at constant exchange rates.
Shares in Remy, which hit a high of 114.10 euros at the start of November, were down 3.6 percent at 107.3 euros at 0908 GMT, although they are still up by around 33 percent in 2017.
“The results were a bit below forecasts, but the stock has risen by more than 30 percent this year and so that’s led to a bit of profit-taking,” Keren Finance fund manager Gregory Moore, whose firm recently sold its Remy shares, said.
The maker of Remy Martin cognac and Cointreau liquor added that its strategy of focussing on selling spirits priced at $50 plus a bottle to boost profits had helped offset a rise in costs due to investments on communications and branding.
Remy Cointreau has been focussing on selling higher-priced spirits, as part of a strategy that has benefited from a rebound in China and the United States.
Its Remy Martin cognac division, which accounts for 80 percent of group profits, saw operating profits rise 17.6 percent on a like-for-like basis to 115.5 million euros.
Private consumption of drinks and spirits has been picking up in China, offsetting the impact of an anti-corruption crackdown in the country on expensive gifts in recent years.
While Remy is promoting higher priced drinks in China, including its $3,000-per-bottle Louis XIII cognac, rival Pernod Ricard (PERP.PA) has taken the opposite approach in launching less-expensive brands in China.
Remy Cointreau shares are trading at 33.4 times estimated 2018 earnings, marking a 65 percent premium to the average for the beverages sector and representing a performance more in line with that of luxury goods stocks.
Reporting by Dominique Vidalon; additional reporting by Sudip Kar-Gupta; editing by Alexander Smith