Destocking In China Drags Down Moët Hennessy, As Revenue, Profits Fall In 2014

Moët Hennessy, the drinks arm of luxury goods group LVMH, endured revenue and profit declines in 2014 as destocking of its flagship Hennessy Cognac brand in China offset solid growth for the brand in the U.S. Moët Hennessy’s revenue declined by 5% to €3.97 billion ($4.53b), while profit fell by 16% to €1.37 billion ($1.56b). Despite the destocking in China, Hennessy’s global total actually grew by 2% to 5.4 million cases in 2014, largely on the strength of its U.S. performance. But with widespread trading down in China and the Cognac brand’s VS edition steadily outpacing other variants in the U.S., revenue and profit were unable to keep pace, leading to respective dropoffs of 11% and 25% for Moët Hennessy’s Cognac & Spirits unit.

Moët Hennessy’s Champagne & Wines division fared better, as a 4% volume increase on the Champagne side (Moët Hennessy leads the global Champagne market with a volume share of nearly 20%) spurred a 2% revenue increase, although profit was down by 5%. In 2014, Moët Hennessy’s revenues were almost equally divided between its two divisions, with each accounting for just under €2 billion ($2.28b). LVMH’s other businesses all enjoyed solid revenue growth in 2014, driving the Paris-based company to a 6% rise in total revenue, to €30.64 billion ($34.92b).

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Tagged : Moet Hennessy, Moët Hennessy USA

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