Market witnesses lift in response to Davide Campari-Milano's delivery
Campari Reports Stronger-than-Expected First-Half Results
In a positive turn of events, Davide Campari-Milano NV has reported stronger-than-expected sales and results for the first half of 2025. The company's adjusted net result of 216.2 million euros was significantly above the forecast of 193.5 million euros, but around 10% lower than the previous year.
The adjusted EBIT of 351.8 million euros was higher than the consensus estimate of 332.5 million euros, showing a slight year-over-year decline of 2.3%. Sales increased to 1.53 billion euros, up 0.3% and above analyst estimates of 1.52 billion euros. The gross margin benefited from a favorable product mix and continued portfolio premiumization.
Cost-saving efforts in production contributed to stability in the gross margin. However, the weakness of the US dollar, which has lost more than 10% against the euro since the beginning of the year, further pressures the profitability of US sales.
Campari's strategy remains defensive in the face of the risk of tariffs. The potential negative impacts from US tariffs on European spirits, with EU products facing 15% import tariffs in the US, are expected. The potential impacts from US tariffs on Campari range from a minimum of 4 million to a maximum of 45 million euros in 2025. Price increases in the US are currently not a realistic option due to low consumer confidence.
Campari announced plans to improve its EBIT margin through targeted cost savings in distribution and administration over a three-year period, aiming to organically gain up to 200 basis points. The company continues to drive the restructuring of its brand portfolio, with the recent sale of Cinzano vermouth and Frattina grappa for a total of 100 million euros.
Regarding its stock valuation, at its current price of approximately €6.54 (as of August 1, 2025), Campari’s stock is considered fairly valued based on key valuation metrics such as Price/Earnings (P/E) around 18, Price/Book Value near 1.78, and Price/Sales of 2.32, which align with industry averages in the beverages sector.
Investors should note that Campari’s latest quarterly results showed flat revenue growth compared to Q2 2024, but net income surged 151%, indicating improved profitability. However, first-half 2025 EBIT declined by 5.6%, though showing signs of recovery in Q2.
Regarding dividend strategy, Campari is known for steady dividend payments, which is typical for consumer defensive stocks. However, given the flat revenue growth and cautious market environment, investors should monitor any changes in payout ratios or guidance from the company. The reaffirmed earnings guidance despite an opaque market outlook suggests a stable but cautious approach to dividends and capital allocation.
In the current market outlook, characterized by economic uncertainty and flat revenue growth in Campari's segment, investors should consider Campari a fairly valued stock rather than a clear buy or sell. The valuation metrics suggest limited upside without stronger growth catalysts. Dividend-oriented investors may find the stable payout attractive, but growth-focused investors should be mindful of the cautious outlook and modest financial momentum.
Investors should weigh their preferences for income versus growth and monitor ongoing earnings trends before increasing exposure. There are no plans to relocate production to the US despite tariff discussions.
For a detailed analysis of Campari's valuation, dividend strategy, broader market outlook, and investor reaction, readers are encouraged to refer to DER AKTIONÄR (32/2025).
Financing the cost savings initiatives in distribution and administration may help Campari improve its EBIT margin as planned. In the midst of current economic uncertainty and flat revenue growth in the beverages sector, investors should consider the company's defensive business strategy and steady dividend payments when considering their investments in finance and investing.
