Davide Campari-Milano SpA, the maker of Wild Turkey bourbon, reported first-quarter profit that missed estimates as sales fell because of weak shipments to Italian retailers and bad weather in Germany.
Earnings before interest and tax dropped 18 percent to 51.5 million euros ($66.9 million) in the three months through March 31, the company said today in a statement. The average estimate of 12 analysts was 60.1 million euros. Sales excluding the effect of acquisitions and disposals slid 9 percent.
Milan-based Campari had warned that some sales in Italy recorded in the first quarter of last year would this year be booked in the second and third quarters as a change in the country’s shipment law led retailers to delay new orders. The company got 29 percent of revenue last year from Italy. The new law reduced sales by about 25 million euros in the first quarter, it said, adding that it may not recoup the losses.
“The results in the first, and traditionally low-season, quarter of 2013 were poor, due to the one-off impact of destocking in Italy,” Chief Executive Officer Bob Kunze-Concewitz said today in the statement. The company also suffered “continued weakness in Germany” because of bad weather and a commercial dispute that affected the Campari and Aperol brands.
Campari fell as much as 3.8 percent in Milan trading and was down 3.2 percent at 5.97 euros as of 1:25 p.m.
“We expect the evolution in consumption trends and the potential persistence of poor weather conditions in Italy and in euro-zone markets to be the key challenges to the group’s ability to recover the first-quarter one-off destocking impact over the next quarters,” Kunze-Concewitz said.
Revenue rose 13 percent to 315.2 million euros after the company bought Lascelles deMercado & Co. last year to add Jamaican rum Appleton as it pushes into emerging markets and expands in the U.S. and Canada. The inclusion of the business depressed operating profit as a percentage of sales, as did Italian drinkers choosing less pricy drinks, Campari said.
Sales improved in the U.S., Latin America and Russia, aided by gains for Skyy vodka, the company said.