Italian drinks group Campari has reported a strong start to the year thanks to double-digit sales growth in the first quarter for aperitif Aperol and French liqueur Grand Marnier.
The Milan-based company said sales increased by a larger-than-expected 9.6% to €370 million on an organic basis between January and March. In the same period in 2018, sales had risen 2.2%.
Analysts were expecting a rate of growth of around 6% for organic sales, which strip out currency swings and any acquisitions or sales of assets.
Aperol, once a niche product sold mostly in northern Italy to make the Spritz cocktail, has become the group's largest brand as aperitifs and cocktails have become more fashionable for younger drinkers.
The sales of orange coloured aperitif grew 27% in the first quarter driven by a double-digit increase in the brand's main markets, including Italy and Germany, as well as a strong performance in new markets such as the United States.
The company said this was the result of marketing initiatives to "deseasonalise Aperol Spritz", to make the traditionally summer cocktail also popular in winter.
Campari said the campaign included pop-up bars on ski slopes in Europe as well as Aperol branded DJ sets in popular winter holiday venues.
Cognac-based liqueur Grand Marnier also outperformed many of Campari's regional brands, with sales up 10 percent thanks to a good performance in the United States, where the group had recently strengthened its distribution capabilities.
Adjusted Operating Profit
Adjusted operating profit (EBIT) rose to €72.4 million, equal to 19.6% margin on sales, this compared with an EBIT margin of 18.2% in the same period of last year.
The margin expansion is expected to continue organically, the company said in a statement, adding that currency swings and potential acquisitions or divestitures would have a less adverse effect on results during the year compared with 2018.
Campari's shares extended gains after results to touch a new record high of €9.18, increasing gains since the beginning of the year to more than 20%.