April 18, 2018 / 8:21 AM / a year ago

UPDATE 1-Shine taken off Remy Cointreau's higher sales by concerns over foreign exchange impact

* Remy shares fall, worst stock on Paris SBF-120 market

* Concerns remain over impact of FX rates on Remy

* Sales helped by solid demand in Chinese market (Adds share price, analyst comment)

PARIS, April 18 (Reuters) - French spirits company Remy Cointreau reported higher annual sales although persistent concerns over the impact of foreign exchange rates on the group knocked back its shares.

Remy shares were down 2.3 percent in early session trading, the worst performer on Paris’ SBF-120 index.

The group, which makes Remy Martin cognac and Mount Gay rum, said sales came in at 1.127 billion euros ($1.39 billion) for its 2017/18 full financial year, which ended March 31.

Remy’s sales had been helped by strong demand for its premium cognac in China, and it kept its target for profit growth this year.

Nevertheless, analysts said concerns remained over the impact of a rise in the euro on Remy’s performance. A strong euro can make Remy’s products less affordable for overseas consumers and hit sales made in the United States.

“Reported 4Q’18 group reported sales of 264.9 million euros was 1.7 percent below consensus of 269.6 million euros as FX (foreign exchange) wiped out the strong organic results,” wrote Liberum analysts in a note, keeping a “sell” rating on Remy.

Finance chief Luca Marotta reiterated on a call with analysts on Wednesday that foreign exchange movements would knock 17-18 million euros off full-year operating profit - in line with previous guidance on this aspect from back in January.

Like its rivals, Remy Cointreau is sensitive to demand in China, where it has been marketing premium spirits, including its $3,000 a bottle top-of-the-range Louis XIII cognac.

The private consumption of drinks and spirits has been recovering in China, offsetting the impact from the country’s anti-corruption crackdown over the past few years which had hit sales of premium brand drinks.

Remy shares, which rose 43 percent in 2017, are down by around 2 percent so far in 2018.

$1 = 0.8080 euros Reporting by Dominique Vidalon and Pascale Denis; Editing by Sudip Kar-Gupta

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