PARIS (Reuters) - Spirits group Remy Cointreau (PA:RCOP) posted a worse-than-expected 4.7% decline in first-half like-for-like current operating profits, as protests in Hong Kong hurt premium cognac sales while promotional spending also dented its earnings.
For the 2019/20 full year, the maker of Remy Martin cognac, Cointreau liqueur and Mount Gay rum predicted a stable current operating profit, citing an uncertain geopolitical environment.
However, the French company kept its medium term outlook, reiterating its ambition to generate 60-65% of its turnover from spirits sold at $50 a bottle or more.
Group current operating profit for the six months to Sept. 30 reached 138.3 million euros ($152.43 million).
This compared with a company-compiled consensus of 15 analysts which forecast current operating profit of 143.3 million euros. The drop in profit also reflected the impact of heavy investments to promote its brands.
The weak results come as Chief Executive Valerie Chapoulaud-Floquet, the architect of Remy-Cointreau's push towards higher-priced spirits to drive profit margins, will be replaced on Dec. 1 by Richemont's Eric Vallat.