Campari reveals steep profits drop

The Italian drinks firm announced that its operating profits fell 18.2% during the third quarter of  the year after slowing US sales.

Yet another set of weak results from an international drinks group.

After Rémy Cointreau gave its investors bad news last week by slashing its predictions for the rest of its financial year, Campari has missed analysts’ forecasts by revealing an 18.2% drop in third-quarter operating profit on sales of €753 million.

The market had been expecting a figure of around €832 million.

Former chief executive Matteo Fantacchiotti left the company abruptly in September after only five months in the driving seat only days after he suggested that sales in the US were under extended pressure. And so it proved.

The Americas division, which accounts for 45% of the group’s sales, has increased turnover by 4.9% so far in 2024 but the pace slowed to just 1% in the third quarter as consumers tightened their belts and hurricanes in Jamaica took their toll.

The Italian spirits maker now says that its fourth-quarter results will be hit by lower production volume and sales mix with aperitifs entering their weakest season for demand.

Campari said it expected net sales to increase by a low-single digit percentage for the full year, after a surprise 1.4% fall in the third quarter.

Macroeconomic factors

Like its rivals, Campari blamed macroeconomic factors and the poor late European summer for its its third quarter figures.

However, it forecast “a gradual return in the medium-term to a mid-to-high single digit organic net sales growth trajectory in a normalized macro environment”.

The question, as for its competitors, is when that will occur.

It said streamlining its product portfolio and clamping down on costs would help to achieve progress.

Meanwhile the integration of Courvoisier Cognac is continuing amid the tough US backdrop for the category and China’s punitive tariffs.

The search for a replacement for Fantacchiotti continues with the Italian group hoping to name his successor in the early part of next year.

The company is also launching a new €40 million share buyback programme largely aimed at underpinning long- term staff incentives.