Q3 sales down underlying 23.5%, better than expected
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FY sales seen at lower end of guidance range
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Shares jump as much as 17% in best day since 2001
Jan 26 (Reuters) - Remy Cointreau's shares had their best day in over two decades on Friday, surging as much as 17% after the French spirits maker's commentary on China and the United States helped to lift some of the investor gloom over these two key markets.
The maker of Remy Martin cognac and Cointreau liquor also reported third quarter sales that were largely in line with expectations and held its full-year guidance, though said its annual sales would be at the lower end of its 15% to 20% range.
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 levels of unsold stock. 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. Inventory levels remained little changed right now but would normalise some time in the next financial year, chief financial officer Luca Marotta said.
Remy reiterated it did not expect U.S. sales to return to growth before the 2024/25 financial year.
In China, "sharp destocking" ahead of Chinese New Year in February was temporary, Marotta said, with inventories expected to be at a healthy level after the celebration.
However, he continued, underlying trends in both countries were close to Remy's most cautious scenario.
While Remy's commentary was relatively conservative, the market had been concerned things could get worse, said Remy investor Oliver Adcock, European portfolio manager at NS Partners.
"It got massively oversold," he continued, adding investors were turning less negative on the two key markets.
Remy's commentary added to optimism following LVMH's results on Thursday. The luxury group saw growth edge up on resilient demand, including in China.
Remy's shares had their best day since September 2001. Peers also benefitted, with shares of rivals Pernod Ricard and Diageo up 6.5% and 4% respectively.
Remy said its sales dropped in the third quarter to 319.9 million euros ($347 million), slightly ahead of analyst expectations. Sales of cognac, which makes up most of Remy's revenues, were down 33.9%.
Diageo (DGE)
