Campari Group Reports Weaker Q3 Results

Campari Group reported weaker third-quarter results, citing macroeconomic challenges and weather-related disruptions.

Group sales for the first nine months of 2024 increased by 2.1% organically, reaching €2.28 billion, but Q3 saw a 1.4% decline.

Campari (LON:0ROY) highlighted "muted top-line performance" due to inflationary pressures, poor weather, and reduced consumer confidence, particularly in key markets.

Regional Performance

• Americas: Struggled with "persisting challenges in selected categories," with U.S. consumption remaining subdued and a hurricane affecting Jamaica.
• Europe: Performance impacted by weak consumer demand aggravated by poor spring and summer weather.
• Asia-Pacific: Faced ongoing macroeconomic challenges.

Financial Highlights

Earnings also took a hit. Adjusted EBIT for the first nine months fell 4.2% organically to €499.4 million, with a sharp 18.2% drop in Q3. Adjusted EBITDA declined 14% in Q3, attributed to an "unfavorable sales mix" and higher fixed production costs.

Future Outlook

Looking ahead, Campari expects continued macroeconomic headwinds but anticipates a return to stronger growth by 2025. The group plans to leverage its core brands, such as aperitifs and tequila, while streamlining its portfolio and focusing on cost efficiency.

> "Campari Group expects to continue to achieve sector outperformance and market share gains leveraging its strong brands in growing categories with a gradual return in the medium-term to mid-to-high single-digit organic net sales growth trajectory in a normalized macro environment," the company stated.

They added that accretion on EBIT margin will be supported by the positive impact of sales growth and mix driven by aperitifs, tequila, and premiumization across the portfolio.

Strategic Changes

In line with its medium-term strategy, Campari announced a new operating model structured around "Houses of Brands" to better align with growth categories.

Additionally, the company will launch a €40 million share buyback program on October 30 to support its stock option and incentive plans.