Campari shares jump 9% as profit beats forecasts on cost savings

Investing.com -- Campari (BIT:CPRI) shares jumped over 9% on Thursday after the Italian spirits maker posted stronger-than-expected third-quarter profits, as cost savings and improved margins offset slower sales growth.

The maker of Aperol and Wild Turkey reported organic EBIT growth of 19.5% for the quarter, nearly double the 10% consensus forecast. Net sales rose 4.4% on an organic basis, below expectations of 5.3%. 

Total quarterly sales reached €753 million, compared with analyst estimates of €775 million. Kepler Cheuvreux said the results reflected “a solid gross margin performance of 180bps organic improvement in Q3, and a 3.8% organic decline in SG&A costs in the quarters.”

All regions posted positive organic growth, led by Asia Pacific at 5.7%, the Americas at 4.7%, and EMEA at 3.8%. The firm cited lower input costs, particularly agave, and a favorable mix from Espolòn tequila, partly offset by higher logistics costs. 

The company said that the Q4 margin should further benefit from more input cost tailwinds.

Campari maintained its 2025 guidance, forecasting moderate organic top-line growth and a flat organic EBIT margin that now includes the impact of tariffs. 

Kepler Cheuvreux said this represented an upgrade, as the new margin view factors in a smaller-than-expected €15 million tariff hit. 

The company’s cost-efficiency plan remained on track, with the company expecting a 50-basis-point margin benefit next year from lower SG&A expenses.

The aperitifs segment, which includes Aperol and Campari, continued to lag. Sales in the category were flat in the third quarter and up 1.3% for the first nine months of the year. 

Aperol sales fell 6% in the quarter, weighed by weak demand in Italy and Germany, while U.S. sales also slowed. By contrast, the rest of the aperitifs portfolio, accounting for about 10% of group sales, grew 21%.

Kepler Cheuvreux cut its 2025 organic net sales growth forecast to 1.4% from 3.0% but raised its EBIT forecast by 1.6%. 

Adjusted EBIT for 2025 is now projected at €614 million, compared with €605 million previously. 

Adjusted net profit for the year is estimated at €375 million, up 1.9%. Forecasts for 2026 and 2027 remain unchanged.

The brokerage reaffirmed a “buy” rating and a target price of €7.20, implying a 32.4% upside from Wednesday’s close of €5.44.

At that target, Campari would trade at 13.5 times its estimated 2026 EV/EBITDA, below its 10-year average of 18 times. 

The 2026 price-to-earnings ratio would be 21 times, about 25% under its historical average.

Kepler Cheuvreux said Campari’s net debt-to-EBITDA ratio improved to 2.9x by the end of September, reflecting progress in strengthening its balance sheet.

The brokerage expects further margin support from cost reductions and lower agave prices in coming quarters.