Campari warns of impact of bad weather, agave contracts on margin

By: Trademagazin editor Date: 2024. 07. 31. 09:38

Italian spirits group Campari warned that its ability to expand gross margin this year would likely be impacted by “some temporary headwinds” after its first-half adjusted operating profit rose 2.1% organically.

Adjusted operating profit at the maker of Aperol and Campari bitters rose to 360 million euros ($390 million) in the first six months of this year, broadly in line with analysts’ expectations.

Campari’s results are in tune with a gloomy sector. Diageo shares fell more than 8% on Tuesday as the world’s top spirits producer narrowly missed its annual profit forecast and warned that challenges could persist in the coming year.

Campari’s new Chief Executive Matteo Fantacchiotti said in a statement that the gross margin is expected to be hit by factors such as poor weather, which affects high-margin aperitifs, and agave supply contract renewals, “guiding both unfavorable sales mix and shifting some of the related expected cost of goods sold (COGS) benefits into next year”.

He added that he remained confident of being able to deliver “consistent operating margin expansion” in the medium-term.

First-half organic revenues rose 3.8% to 1.52 billion euros, with an acceleration in the second quarter. ($1 = 0.9233 euros)

Reuters