Italian drinks group Campari posted a 19.6% jump in like-for-like sales in the first quarter, thanks to price increases put in place last year as well as some temporary effects such as an earlier Easter.
Details
January-to-March total revenue was €667.9 million compared with €534.8 million a year earlier, the maker of Aperol and Campari bitters said in a statement.
Adjusted operating profit margins rose to 23.9% from 21.4%, benefiting from a positive foreign exchange effect in the United States.
The results marked a "strong start" to the year, analysts at Jefferies said in a note, underlining continued revenue growth momentum across regions and particularly in the Americas.
Sales in the United States, the group's main market accounting for almost half of total turnover, jumped 23% as consumer demand held up strongly and thanks to pricing initiatives.
Only last week, peer Remy Cointreau predicted flat organic sales in financial 2023-2024, reflecting weak demand in the United States.
Campari's first-quarter US sales were lifted by a strong performance of its Tequila brand Espolòn, as well as triple-digit growth from Aperol, the group's best-selling product and the key ingredient for the Spritz cocktail.
The group confirmed its guidance for 2023 of a flat adjusted earnings before interest and taxes (EBIT) margin of 21.1%, given the current volatile macro-environment.
However, it warned that despite initial signs of input cost inflation easing, a normalisation in volume growth would be among the factors expected to affect margin trends.
Shares
Milan-listed shares rose as much as 3.2%, briefly extending gains after results were published.
The above news was followed by the following update:
UPDATE 3-Campari makes strong start to year, sees US demand holding up
Campari expects demand to hold up in its main US market despite reports of weakness from some rivals, the Italian drinks group said on Tuesday 2 May, as strong sales of its Aperol bitter and tequila liquor in particular boosted first-quarter results.
The company reported a 19.6% jump in like-for-like sales to €667.9 million in the first three months of the year, thanks to price increases and temporary effects such as some shipment phasing and an earlier Easter.
First-quarter adjusted operating profit margins rose to 23.9% from 21.4%.
The results marked a "strong start" to the year, Jefferies analysts said in a note.
Sales in the United States, which typically account for almost half Campari's total turnover, jumped 23%. Last week, peer Remy Cointreau predicted flat organic sales in financial 2023-2024, citing weak U.S. demand.
Campari's first-quarter US sales were lifted by triple-digit growth from Aperol, its best-selling product and the key ingredient in Spritz cocktail, as well as tequila brand Espolòn.
"Tequila is starting to become, I think, a global phenomenon," CEO Bob Kunze-Concewitz told analysts.
The company said investments put in place to double production across all of its key products were starting to bear fruit as - after reaching full capacity last year - it now has capacity to improve the availability of tequila.
Campari said it expected to launch an international expansion campaign for its tequila brands in 2024 and it is getting more access to liquids and agave pinas, from which the liquor is distilled.
The group confirmed its 2023 guidance for a flat adjusted earnings before interest and taxes (EBIT) margin of 21.1%, given a volatile macro-economic environment.
Kunze-Concewitz said the unwinding of temporary shipping effects would have a negative impact of around 30 million euros on second quarter results.
Milan-listed shares in the group closed up 2.7% on Tuesday 2 May, outperforming a 1.7% drop in Milan's blue chip index .FTMib.
Read More: Campari Benefits As US Drinkers Get Taste For Spirits
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