Italian drinks group Campari posted a 14.2% rise in like-for-like revenues in the first half of this year and confirmed its margin target for the year but its shares slid on some disappointment over the figures.
Sales Growth
Sales growth for the maker of Aperol and Campari bitters slowed down in the second quarter compared to the first three months this year, which had benefitted from some temporary effects.
Sales Affected By "Very Poor Weather" And "Temporary Delistings"
Sales in the last three months were affected by "very poor weather across core Southern and Central Europe and temporary delistings from selected European retailers due to commercial negotiations in connection with price increases", the company said on Wednesday 26 July.
First-Half Net Sales
First-half net sales came in at €1.46 billion, while analysts expected €1.47 billion, according to a company provided consensus cited by Italian broker Equita.
Statement By Jefferies Analysts
Jefferies analysts said the shares needed a "beat-and-raise to perform" after a strong showing so far this year.
Adjusted Operating Profit And Guidance
Campari's adjusted operating profit rose 15.1% organically to €360 million in the first six months. It confirmed its guidance of a flat organic adjusted EBIT margin for 2023.
"Confident Of The Positive Business Momentum Across Key Brand-Market Combinations"
"Looking at the remainder of 2023, we remain confident of the positive business momentum across key brand-market combinations, reflecting business seasonality and expected normalisation in volume growth" CEO Bob Kunze-Concewitz said in a statement.
The above news was followed by the following update:
UPDATE 2-Campari Shares Slip After First Half Fails To Lift Spirits
Italian drinks group Campari posted a 14% rise in like-for-like revenues in the first half of this year and confirmed its margin target for 2023 but its shares retreated on some disappointment over the figures.
Sales growth for the maker of Aperol and Campari bitters slowed down in the second quarter compared to the first three months this year when it benefitted from some temporary effects.
Sales in the last three months were affected by "very poor weather across core Southern and Central Europe and temporary delistings from selected European retailers due to commercial negotiations in connection with price increases", the company said on Wednesday 26 July.
The price increases have since been passed through, the company said.
Chief Executive Bob Kunze-Concewitz told Reuters he now expected commodities and logistic prices to stabilise or fall. The group does not see a further price increase this year, he added.
Campari confirmed its guidance for a flat organic adjusted EBIT margin for 2023.
"Looking at the remainder of 2023, we remain confident of the positive business momentum across key brand-market combinations, reflecting business seasonality and expected normalisation in volume growth" Kunze-Concewitz said in a statement.
Asked about possible acquisitions, Campari's CEO told Reuters that, under a loyalty scheme approved in 2020, the group's controlling shareholder will get five voting rights for each share it owns starting from the beginning of August.
"This will give the majority shareholder more flexibility to make a larger deal," he said, calculating that in an all-share transaction the company theoretically could have 20 billion euros of firepower.
Campari is controlled by the Garavaglia family.
First-half net sales came in at €1.46 billion, while analysts expected €1.47 billion, according to a company provided consensus cited by Italian broker Equita.
Campari shares traded around 3% lower in late afternoon on Wednesday 26 July.
Jefferies analysts said the shares needed a "beat-and-raise to perform" after a strong showing so far this year.
Campari's adjusted operating profit rose 15.1% organically to €360 million in the first six months, despite cost inflation having eroded margins.
Read More: Campari Makes Strong Start To Year, After Pricing Boost
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