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ITALY: Destocking hampers Davide Campari-Milano in Q1

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Davide Campari-Milano has posted what it has described as an "overall satisfactory" set of results for its first quarter, as destocking dragged on its performance.

The Italy-based wine and spirits company said today (13 May) that pre-tax profits for the three months to the end of March came in 4.1% down on the corresponding quarter a year earlier, totalling EUR38.4m (US$52.2m). Net sales for the quarter dipped slightly, by 0.4% to EUR190.1m.

Operating profits, or EBIT, also headed south, dropping by 5.4% to EUR42.6m.

Spirits sales climbed by 3.5%, driven by an 8.2% lift in sales for Campari's Skyy vodka brand. The company's namesake bitter brand, however, suffered a 3.5% fall in sales. Cabo Wabo Tequila, meanwhile, suffered badly from destocking, seeing sales in the quarter plunge by 70%.

On the wine front, sales dropped by 9.4%, while soft drinks sales were down by 6.6%.

"Going forward, we expect to benefit from the consumption momentum behind key brands, the reduction of destocking pressure as well as an improving input costs and currency outlook," said company CEO, Bob Kunze-Concewitz. "However, we will maintain a cautious stance, with focus on cost containment, working capital and cash generation throughout the year".

Last month, Campari made its largest purchase transaction when it bought Wild Turkey from Pernod Ricard for US$575m.


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