PARIS-Remy Cointreau SA said Friday its first-quarter sales fell
19%, highlighting the struggle the group faces to revive growth
amid a deep sales slump in China.
The French maker of Remy Martin cognac said sales fell to 214.8
million euros ($290.5 million) from EUR263.7 million in the three
months ended June 30 as a crackdown on corruption in China
continues to dent demand for high-end sprits such as Cognac.
Remy Cointreau is exiting a difficult year that saw its net
profit halve, hit by a dramatic slide in sales in China. The
company has been among those hardest hit by Chinese President Xi
Jinping's anticorruption drive, which has undermined the
long-standing tradition of gift-giving and fancy dining that had
previously propelled sales of Remy's pricey cognacs.
Remy Cointreau still showed signs of optimism for the year
ahead. The group confirmed its full-year goal of posting organic
growth in both revenue and operating profit for its 2014-2015
financial year. That target, however, excludes the loss of a
distribution contract in the U.S.
On an organic basis, stripping out the impact of currency moves,
acquisitions and disposals, as well as the U.S. contract loss,
revenue fell 5.7% in the first quarter.
The task to revive growth will be led by incoming chief
executive Valerie Chapoulaud-Floquet. The Moet Hennessy Louis
Vuitton LVMH (MC.FR) executive will officially take over as CEO in
September, almost eight months after her predecessor left the
company.
Write to Ruth Bender at ruth.bender@wsj.com
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