Campari books solid growth despite weather woes - results data

Sales in six months to end of June rise 3.8% to EUR1.52bn (US$1.65bn)
Healthier second quarter, climbing 6.9%, builds on Q1’s flat (+0.2%) top line
‘Americas’ region up 6.8% but ‘Asia Pacific’ slides by 10.7%
Aperol sales increase 4.7%, Campari rises by 9.3%

Campari Group has reported a solid sales increase of almost 4% from the first six months of 2024, despite the negative impact of poor summer weather in several European markets.

The second quarter of the year turned in a healthier performance than Q1’s flat top-line showing, jumping 6.9% to EUR859.9m following strong results from the company’s flagship aperitif brands, Aperol and Campari, in Germany and the US. Aperol enjoyed a 4.7% increase in global sales in the half-year and now accounts for 26% of the group’s sales.

The brand owner also highlighted the ongoing integration of Courvoisier cognac into the company. Campari Group acquired Courvoisier from Beam Suntory in December last year for US$1.32bn, making it the biggest purchase in the company’s history. The integration process is going well, according to the new owner, with the incorporation of supply chain, IT, administration and logistics operations at an advanced stage.

Courvoisier is now ‘live’ in all markets, the company noted, with the brand contributing sales of EUR8m in the May-June period. A strategic brand assessment is underway and will be completed by the end of the year with a revamped portfolio ready for rollout in 2025. Additional staff are also in the process of being hired in the key cognac markets of China and the US to speed Courvoisier’s transformation into a luxury brand.

Elsewhere in the brand portfolio, Espolon tequila was a standout performer, delivering strong double-digit growth that accelerated markedly in the second quarter of the year (+30.4%). The brand recorded half-year growth of 22.4%, the highest rate of any of the group’s priority brands, with the US, along with Australia, Italy and the global travel retail channel, proving drive markets.

Turning to geographical performance, the ‘Europe, Middle East & Africa’ reporting region recorded a rise in sales of 3.3% thanks to the performance of the group’s priority brands despite poor weather in Q2, which hit sales in Italy, France and the UK. Germany, however, bucked the regional trend of providing challenging market conditions, posting half-year sales growth of 13.4%.

In contrast to EMEA, the ‘Americas’ region was up 6.8% with the US (+3.5%) and Jamaica (+10.7%) warranting positive mentions in the results commentary. Despite the challenging market conditions, the US enjoyed accelerated growth with a Q2 sales rate increase of 7.2%, versus -0.4% in Q1. Espolon and Grand Marnier enjoyed the highest rises in the US but the outlook was less encouraging for the Skyy vodka brand.

The market conditions in the ‘Asia Pacific’ region were more challenging, however. Sales plummeted 10.7%, a drop the company attributed to a “tough competitive environment” in Australia, traditionally a key market for Wild Turkey whiskey, as well as to route-to-market changes in the region.

“We recorded a solid performance in the first half of the year with acceleration in the second quarter, yet again outperforming the industry,” said CEO Matteo Fantacchiotti. “In the remainder of the year, we expect to continue to outperform the industry … playing in growing categories in an environment currently showing softer market dynamics and increased price competition in core markets, while the macro remains volatile.

“On a full-year basis, our ability to expand gross margin is expected to be impacted by some temporary headwinds (such as poor weather affecting high-margin aperitifs and agave supply contract renewals) guiding both unfavourable sales mix and shifting some of the related expected COGS [costs of goods sold] benefits into next year,” he added.

“However, for the medium-term, we remain confident in the continued growth momentum and our ability to deliver profitable growth with consistent operating margin expansion.”