French spirits group Remy Cointreau said Thursday that record cognac sales and a shift upmarket had helped it increase net profit in its 2015-2016 fiscal year to 102.4 million euros ($116.6 million).
"Exceptional spirits" of more than $50 per bottle and record sales of its Remy Martin cognac helped push sales up 8.9 percent to 1.05 billion euros and operating profit up by 14.7 percent to 178.4 million.
Despite the uncertain economic environment "the Group remains confident in its strategy of accelerating its move upmarket, supported by product creativity, targeted increases in communications investments, and optimisation of its distribution network," Chief Financial Officer Luca Marotta said in a presentation accompanying the earnings statement.
While the company didn't provide a complete breakdown of sales on a regional basis, the presentation said there had been an "upturn in China" for Remy Martin.
Cognac makers have had a rough ride the past few years after Chinese authorities cracked down on expensive gifts to officials, which had helped drive up sales for luxury items.
The company said shipments from distributors to retail outlets climbed 5 percent in volume, although they were stable in value.
The global 3.2 percent increase in Remy Martin sales excluding currency effects, after two years of decline, was "mainly driven by strong performance in the United States, Africa, South-East Asia and Japan" the company said.
However high-end versions of its other spirits, such as Cointreau, Metaxa and Mount Gay rum couldn't help overcome difficulties due to the downturns in Russia and Greece, with sales slipping 1.5 percent when currency effects were stripped out, and volumes falling four percent.
Management proposed a dividend of 1.60 euros per share, an increase of 4.6 percent, and said it expected operating profit to continue growing this fiscal year assuming constant exchange rates.