October 22, 2023
Shares in Davide Campari-Milano suffered a significant decline as the maker of Aperol reported lower-than-expected sales growth for the third quarter.
At 1043 GMT on Thursday, shares were down 13% at EUR9.60, following a suspension earlier in the day.
Despite reporting a 4.4% organic growth in sales for the quarter ending in September, the Italian distiller fell short of expectations. Analysts surveyed by Visible Alpha had predicted an organic growth rate of 8.5%.
Earnings before interest and taxes stood at EUR147.4 million, down from EUR177.2 million in the same period last year.
As a result, Citi analysts expressed disappointment in the overall performance and noted its potential impact on the stock.
The lower-than-expected sales growth can be attributed to anticipated normalization and adverse weather conditions in key European markets, particularly in Italy, which affected the demand for aperitifs during their peak season.
It is important to note that last year’s third quarter witnessed significant sales growth of 19% organically, primarily driven by price increases.
While a more favorable comparison base and potential cost-of-goods-sold headwinds may lead to better results in the fourth quarter, Citi analysts have warned that the magnitude of the miss in the third quarter could prompt mid-single-digit downgrades to consensus earnings for 2023.
Looking ahead to 2023, Campari expects to maintain a flat organic adjusted EBIT margin.
