Italian spirits group Campari reported better than expected sale growth in the third quarter as its best-selling aperitif Aperol continued to enjoy a double-digit growth.
Campari's turnover rose 4.9% between July and September on an organic or underlying basis, the company said on Tuesday, driven by a 21.5% jump in sales of Aperol which posted a strong performance in the United States.
Investors had expected a slowdown in sales compared with last year, when the group posted a 8.9% rise in organic sales, and were reassured by the continued good performance of some of the group's high-margin brands.
Organic sales strip out currency swings and any acquisitions or sales of assets.
Adjusted earnings before interest and tax (EBIT) rose to €288 million ($319 million) in the first nine months, with the margin on sales improving to 22.1% from 21.6% in the same period of last year.
The group said it expected the positive momentum to be reflected in the whole 2019, but sounded a cautious note on the possibility of improving further its EBIT margin, an indicator of profitability closely monitored by financial analysts.
A continued rise in the price of agave, a key ingredient for tequila, and higher marketing costs could limit the improvement in profitability, it said.
"EBIT margin expansion will be moderated by a higher than expected increase in the agave purchase price ... as well as re-investments into brand-building initiatives and strengthened sales capabilities," Campari said regarding its guidance for 2019.
The group did not mention the potential impact of tariffs imposed by the United States on some European spirits.
Shares in Campari pared an initial 3% gain after the update to be up 0.6% by 11.40 GMT.