Diageo sales plunge on market challenges, but Guinness shines

Diageo sales plunge on market challenges, but Guinness shines
Related media – Breaking news

Shares of Diageo, the renowned spirits maker behind Johnnie Walker, fell more than 10% on Tuesday after it reported its first annual sales decline since the pandemic began. By the end of the trading day, the shares had recovered some losses but still closed down 5.08%.

The London-based company reported a 0.6% decline in organic net sales for the fiscal year ended June 30, attributed primarily to underperformance in Latin America and the Caribbean markets. Reported net sales fell 1.4%.

Despite the overall downturn, Guinness emerged as a bright spot for Diageo. The iconic Irish stout, which has seen a surge in popularity among younger consumers thanks to celebrity endorsements, led to an 18% increase in overall beer net sales. Guinness volume growth was particularly strong in Ireland and Great Britain, contributing to double-digit increases.

The trend towards soft drinks also benefited Diageo: sales and volumes of Guinness 0.0 more than doubled during the financial year.

Diageo’s portfolio includes other well-known brands such as Baileys, Smirnoff, Captain Morgan, Don Julio and Tanqueray.

CEO Debra Crew described the past year as “challenging” for both the company and the industry overall, citing macroeconomic and geopolitical uncertainties. She noted that North America has been particularly hard hit by cautious consumer behavior and inventory replenishment issues.

“Although Diageo’s latest results are disappointing, they are not disastrous,” said Chris Beckett, head of equity research at Quilter Cheviot. “Revenues were relatively flat, down slightly 1% overall and in the second half. The situation in Latin America is concerning, as it was the main driver of the profit warning earlier this year. Economic conditions in the region have exacerbated inventory issues, leading to a significant margin loss.”

You may also be interested in – Digital media

You May Also Like