Diageo Sales Unexpectedly Slide as Demand Wanes in Europe
Diageo said sales unexpectedly declined in the third quarter as business deteriorated across Europe, Asia and Latin America.
Organic net revenue in the three months ended 31 March fell 0.7 per cent, the London-based maker of Guinness stout said in a statement Thursday, trailing the median estimate of 15 analysts for a 2 percent increase. That compared with the second quarter’s 0.7 percent growth.
“Our performance in the quarter reflects continued tough conditions in the emerging markets and subdued consumer demand in some developed markets,” chief executive officer Ivan Menezes said in the statement.
Organic sales in the Asia-Pacific region fell 6 per cent, Diageo said. Government anti-corruption measures have curbed shipments of scotch and baijiu liquor in China at a time when the company is also battling weakness across Europe, where revenue declined 1.3 per cent in the quarter. Latin American and Caribbean sales dropped 10 per cent.
“This quarter will do nothing to rebuild market confidence,” Exane BNP Paribas analyst Francois Mosnier said in a note, adding that shipments were disappointing. “Destocking was stronger than we expected in Asia and Latin America, and another devaluation in Venezuela took its toll.”
Bloomberg News, edited by ESM