Campari Sees Destocking, On-Premise Closures Take A Toll
July 28, 2020Campari Group posted sales down 11% to €768.7 million ($902m) in its first half ended in June, as distributor destocking and the downturn in the on-premise cut into its results. Campari noted that the spring and early summer is “the peak season for the high-margin and highly on-premise skewed aperitif business” in which its Aperol and Campari brands have thrived lately. Adjusted EBIT fell 31% to €130.4 million ($153m) for the first half.
Sales in the U.S., Campari’s largest market, were down a relatively modest 4.1% in the first half, as robust off-premise gains nearly offset the on-premise shutdown. Campari typically derives about 30% of U.S. sales from the on-premise. While that channel has suffered during the pandemic, the company has seen 40% growth across its off-premise business, with all of its core brands showing double-digit gains.
Chief executive Bob Kunze-Concewitz acknowledged the difficult climate, noting that “strong brand sell-out momentum in the off-premise continued across key markets, although shipments remained below positive consumption trends due to destocking.”
Looking ahead, the company says it expects Covid-19 impacts on the business to “lessen with the gradual lifting of the restrictive measures across markets, based on the current visibility. Moreover, shipments are expected to progressively catch up with the positive sell-out trends once the destocking activities are completed at wholesaler level.”—Daniel Marsteller
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