The maker of Aperol and Campari bitters outperformed other spirits makers that have suffered from a slowdown in demand in the United States after a post-COVID surge, poor weather in Europe and a tough economy in China, analysts said. But its performance was still weaker than expected.
Organic sales growth of 4.4% for the quarter was well behind the more than 8% expected by analysts on average, according to a company-compiled poll. Adjusted earnings before interest and tax were down 11.4% at 160.8 million euros due to a negative currency impact.
The company said poor weather in Europe, which has ranged between extreme heat and flooding this year, had hit sales in its home market in particular.
It also flagged big declines in other key markets like Jamaica, while a return to more normal levels of sales in the U.S. also hurt its performance.
"In the medium term, we remain confident to continue delivering strong organic topline and margin expansion leveraging mix improvement as well as input cost inflation easing," Chief Executive Bob Kunze-Concewitz, who is due to retire in April, said in a statement.
Campari confirmed the group's full year guidance of a flat organic margin for EBIT-adjusted earnings. A Milan-based trader added that some had hoped Campari's full-year margin outlook would be raised.
However, Trevor Stirling, analyst at Bernstein, said the hit to Campari's share price was a "massive over-reaction".
While Campari's return to more sustainable levels of growth had come earlier than expected, combined with poor weather in Europe and destocking in Italy, it didn't indicate a more fundamental issue for the group, he said.
"Is there any sense here that this is a broken story? Not at all," he said.
Campari's shares, which were briefly suspended multiple times on Thursday, were down 11% at 1055 GMT.
($1 = 0.9481 euros)
