China destocking preventing Hennessy growth

Destocking of Cognac in China is continuing to negatively affect Hennessy-owner LVMH’s revenue from wines and spirits, despite “excellent momentum” in the US.

The French drinks group, which specialises in luxury goods, recorded a 7% decline in reported revenue from its wine and spirits division, which also includes Glenmorangie and Ardbeg single malt whiskies.

Revenue from the portfolio dropped from €2.8 million in the first nine months of 2013, to €2.6m in the same period in 2014.

However, the decline was not enough to dramatically offset LVMH’s overall revenue for the period, which grew 4% to €21.4 billion. The group’s wine and spirits portfolio was the only business arm to decline, while fashion and leather goods, perfumes and cosmetics, watches and jewellery and selective retailing all grew.

In its Q3 2014 financial update, LVMH said the group would “continue its strategy focused on innovation and targeted geographic expansion in the most promising markets”.