Italian drinks group Campari said that rising input costs would push back expected profitability gains, sending shares down more than 6%.
The maker of Aperol and Campari bitters, which had forecast gross margin to improve by around 70 basis points this year, warned this increase would not materialise due to higher costs.
Campari now expects its operating margin to remain stable on a like-for-like basis this year compared with 2021.
Cost Pressure To Intensify
"Temporary input costs pressure is expected to further intensify during the current year, postponing the gross margin accretion and ultimately leading to broadly unchanged organic EBIT margin in 2022," CEO Bob Kunze-Concewitz said in a statement.
Shares in Campari were down 6.6% at 11:05 GMT.
The Milan-based group said that the new outlook included the possibility of beverage price hikes to mitigate rising costs.
Campari reported a nearly 26% rise in like-for-like sales in 2021 helped by increased online purchases of spirits and cocktail consumption at home.
In the Americas, which accounted for 42.7% of total group sales, organic sales increased by 23.0% in 2021, up from 19.9% in full year 2019.
The brands Espolòn, Grand Marnier and Aperol registered strong double-digit growth, while Campari grew by high single digits.
In North, Central and Eastern Europe, which accounted for 20.2% of total sales, the company saw organic growth of 18.6%.
Germany witnessed year-on-year growth of 10.7%, driven by Aperol, Aperol Spritz ready-to-enjoy and Campari. Sales in the UK grew by 39.1%, while Russia saw 25.0% growth.
Sales in Southern Europe, Middle East and Africa, comprising 29.4% of total sales, grew 36.7% with Italy seeing 36.4% jump, mainly driven by the continued ‘revenge conviviality’ in the on-premise and increased consumption frequency across other channels.
Aperitifs brands – Aperol, Campari and Campari Soda – saw high double-digits growth in the region compared to both 2020 and 2019, while Crodino reported low-double digit growth.