Campari drops as it misses annual earnings targets

CAMPARI’S shares fell six per cent as the Italian drinks company disclosed it had missed profit forecasts for the year despite positive growth in most areas.

Sales were up 9.6 per cent to €1.27bn (£1.07bn) leading to a net profit growth of 1.9 per cent to €159.2m – but both fell short of analysts’ respective forecasts of €1.28bn and €174m.

Gruppo Campari said the Americas – its largest region, accounting for 33.5 per cent of group sales – grew 5.4 per cent, largely thanks to high demand for its Wild Turkey bourbon in the US and strong growth in Argentina and Canada.

But the Italian market, which accounts for 31.6 per cent of group sales, remained mainly flat with an increase of just 1.3 per cent while sales of soft drinks fell 5.9 per cent.

Campari pointed to Aperol as its largest brand by sales value after the aperitif was boosted to a 38.9 per cent growth last year due to strong demand across Europe, particularly in Germany and Austria.

The Milan-based company spent €31.5m on acquisitions last year, including Russian distributor Vasco and Brazilian brand Sagatiba – two new markets which Campari expects to boost revenues over the coming year.

Campari chief executive Bob Kunze-Concewitz said the drinks company could spend up to €700m on acquisitions this year, but he said: “Although we are looking at opportunities, we believe no deal is better than a bad deal.”

Despite a historically soft start to the year, Campari “remains cautiously optimistic” about the year ahead.