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Investing.com -- Davide Campari (LON:0ROY) Milano (BIT:CPRI) posted a 2.9% rise in adjusted operating profit for the second quarter, while warning that U.S. tariffs could reduce this year’s earnings by as much as 45 million euros ($51 million).
Adjusted EBIT reached 352 million euros for the first half, ahead of the 326 million euros expected by analysts, according to a Visible Alpha consensus.
Organic net sales rose 3.5% in the second quarter, ahead of the 1.4% consensus. In the first half, the sales were flat at 1.53 billion euros.
The company’s shares jumped more than 7% in Milan trading on Friday.
"While we think buyside expectations had drifted somewhat higher in recent weeks amidst better weather in Europe, we think the results will nevertheless be well received, further supported by a reiteration of the company’s cost savings program running on-track," Morgan Stanley (NYSE:MS) analysts commented.
The Italian spirits maker, known for Aperol and Campari, faces headwinds from a 15% U.S. import tariff on European wine and spirits, which will remain in place until trade talks resume in the autumn.
The company estimates the earnings impact could range from as little as 4 million euros, if tariffs are removed, to as much as 45 million euros, excluding any mitigating actions.
CFO Paolo Marchesini said Campari does not plan any “meaningful” price increases in the U.S. market, citing subdued consumer confidence. He also ruled out shifting production to the U.S. in what he called an “uncertain environment.”
Adding to the pressure, CEO Simon Hunt noted that the dollar’s continued weakness — with the U.S. currency down more than 10% against the euro since January — presents another earnings challenge.
Still, the group confirmed its full-year guidance and said the third quarter would be crucial in shaping its outlook. Campari plans to update investors on its strategic direction in November.
"There is potentially more visibility on tariffs which impact our forecasts, but overall we expect a solid second half of the year," said Barclays (LON:BARC) analysts in a note.