Remy Cointreau (RCOP.PA) experienced a remarkable day in the stock market, marking its best performance in over two decades on Friday.
The French spirits producer, known for its Remy Martin cognac and Cointreau liquor, witnessed a surge of up to 17% in its shares.
This impressive boost in the company’s stock came in response to Remy’s commentary on the markets in China and the United States, which helped alleviate some of the investor concerns surrounding these two crucial regions.
In addition to the positive market sentiment, Remy Cointreau also announced its third-quarter sales figures, which were largely in line with expectations.
The company maintained its full-year guidance, but with the caveat that annual sales would likely fall at the lower end of its previously estimated range of 15% to 20%.
Remy had previously adjusted its full-year guidance in October due to declining sales in the United States, following a post-COVID boom.
This had resulted in high levels of unsold stock among wholesalers and retailers in the country. Similarly, sales growth in China had fallen short of expectations due to economic challenges.
However, on Friday, Remy reported a notable improvement in the U.S. market compared to the previous quarter.
While inventory levels remained relatively stable for now, Chief Financial Officer Luca Marotta anticipated that they would normalize in the upcoming financial year.
Remy reiterated that it did not anticipate a return to sales growth in the United States until the 2024/25 financial year. In China, Marotta attributed a temporary “sharp destocking” to preparations for the Chinese New Year in February, expressing confidence that inventory levels would return to a healthy state following the celebration.
Despite Remy’s cautious commentary, it provided reassurance to the market, which had been bracing for potentially worse outcomes.
Oliver Adcock, a Remy investor and European portfolio manager at NS Partners, noted that the market had overreacted and that investors were becoming less pessimistic about these key markets.
Remy’s optimistic performance echoed LVMH’s results from the previous day, where the luxury group saw growth bolstered by resilient demand, particularly in China.
As a result, Remy’s shares had their best day since September 2001, and other industry peers such as Pernod Ricard (PERP.PA) and Diageo (DGE.L) also experienced gains of 6.5% and 4%, respectively.
Remy reported third-quarter sales of 319.9 million euros ($347 million), slightly surpassing analyst expectations.
Notably, sales of cognac, which constitutes a significant portion of Remy’s revenue, experienced a decline of 33.9%.