Rémy Cointreau sees smaller loss, shares gain

Investing.com -- Shares of Rémy Cointreau (EPA:RCOP ) rose after the company reported a smaller-than-expected fall in its half-year EBIT, driven by favorable currency effects and reduced marketing expenditures. 

At 5:09 am (10:09 GMT), Rémy Cointreau was trading 4.9% higher at €60.20.

The company's EBIT for the first half of fiscal 2025 exceeded analyst expectations, with a reported decline of 17.6% compared to the 20.6% drop projected by market consensus. 

This unexpected performance led to a 10% beat on EBIT, said analysts at Morgan Stanley (NYSE:MS ).

“We estimate the mid-point of the FY25 guide implies consensus revisions of c.-4% at the top line and c.-12% on EBIT,” said analysts at Stifel in a note.

Analysts at Morgan Stanley noted that the savings from reduced marketing spend and gains from foreign exchange fluctuations played a pivotal role in mitigating the impact of declining sales. 

Despite the overall challenging environment, particularly in the U.S. and Chinese markets for cognac, these operational adjustments provided a temporary cushion to the company’s financials.

However, the outlook remains cautious. Rémy Cointreau revised its full-year guidance, predicting a decline of 15% to 18% in organic sales growth and a compression in EBIT margins to 21-22%.

This forecast suggests further downward revisions to consensus profit estimates, aligning with Morgan Stanley's view that the company still faces headwinds, including tariff-related uncertainties and persistent weakness in key regions.

However, Morgan Stanley maintains a skeptical stance, citing ongoing structural challenges and the likelihood of continued underperformance in the medium term.

Source: Investing.com