LONDON (ShareCast) - (Sharecast News) - French spirits group Rémy Cointreau has raised its profit targets for the full year, predicting less of a hit from trade tariffs than previously expected.
The Cognac-headquartered firm said it expects organic current operating profit (COP) to register a mid-to-high-single-digit decline, compared with previous guidance of a mid-to-high-teens decline.

The company expects a return to organic growth in the second half, with full-year organic sales to grow at a mid-single-digit percentage, driven by a strong rebound in sales to the US.

Alongside its first-quarter results on Friday, Rémy Cointreau said that, following the minimum-price agreement between China and the US, trade tariffs are now expected to have a €45m negative net impact on the bottom line, down from €65m previously.

On the downside, the hit from currency movements is expected to be worse: the company has predicted a €50-60m adverse impact from FX on sales (down from €30-35m previously) and a €15-20m impact on COP (down from €10-15m previously).

Sales totalled €220.8m in the three months to 30 June, up 1.8% over last year and 5.7% higher on an organic basis.

Cognac sales rose 1.3% organically as a decline in China - driven by tough market conditions and the inaccessibility of Chinese duty-free markets - was outweighed by a "very steep rise" in the US due to favourable comparatives.

The liqueurs and spirits division recorded 17.3% organic growth, again driven by strong growth in the US, along with renewed growth in EMEA.

The stock was up 5.6% at €60.90 by 1035 in Paris.

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