By Andrea Figueras

Davide Campari-Milano backed its view for the current year despite a slight decrease in sales for the first quarter, at a time when drinks makers grapple with a more normalized growth environment after the postpandemic boom.

The Italian distiller said Tuesday that it booked sales of 663.5 million euros ($714.5 million) for the first three months, compared with EUR667.9 million in the prior-year period. The result compares with analysts' forecasts of EUR661.2 million, according to a poll of estimates compiled by Visible Alpha.

Sales grew 0.2% organically but fell 0.7% on a reported basis. Results were mainly driven by the strong performance of Campari and Aperol aperitifs, the company said.

Adjusted earnings before interest and taxes dropped to EUR151.5 million from EUR159.3 million previously.

"We entered the year yet again with momentum and a resilient performance in a low season quarter and despite the expected tough comparison base," Chief Executive Matteo Fantacchiotti said.

In April, the company closed the acquisition of Beam Holding France, the owner of Courvoisier cognac, which was first announced in December. The deal, expected to have limited impact in the first transition year, was set to boost the company's geographical footprint in the U.S. and China, two key markets for spirits companies.

After positive trends during the pandemic, drinks makers are facing consumption normalization leading to high stock levels, particularly in the U.S., where the company posted a decline of 0.4% in sales during the quarter.

In Asia Pacific, Campari saw a 20% drop in sales due to a challenging environment in Australia and ahead of changes in China and India. In February, the company said that it intended to create a new route-to-market in China with a targeted regional distribution model.

At 1143 GMT Campari's shares traded 5.3% higher at EUR9.94. Other European drinks makers such as Remy Cointreau and Pernod Ricard also saw their shares up 7.8% and 2.7%, respectively. Shares in Diageo, which has no direct exposure to brandy or cognac, jumped 1.2%.

The share move could be attributed to hopes that the summit between China's President Xi Jinping and French President Emmanuel Macron will lead to Beijing calling off an anti-dumping investigation against brandy imported from the European Union, AJ Bell Investment Director Russ Mould said.

In January, the Chinese government launched the probe, a measure that was seen as an escalation of trade tensions between the regions as well as a potential hit to drinks makers, especially to those more exposed to the country and with a higher proportion of their sales coming from cognac.

Xi and Macron haven't reached an official agreement, but apparently the Chinese president showed openness during the meeting, Stifel analyst Cedric Norest said.

However, there is still a risk that brandy and cognac remain entangled in a wider web of trade discussions, Mould added.

For the current year, Campari didn't disclose a numerical guidance but continues to expect to outperform the wider industry despite what it called normalizing consumption patterns in the sector and a volatile macroeconomic environment.

As for the medium-term, it targets continued growth momentum and intends to deliver profitable growth. It also expects consistent operating margin expansion partly driven by sales mix, pricing and operational efficiencies, it said.

Write to Andrea Figueras at

(END) Dow Jones Newswires

05-07-24 0809ET