DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Drinks

Diageo Warns On Profit As LatAm, Caribbean Demand Falters

By Reuters
Share this article
Diageo Warns On Profit As LatAm, Caribbean Demand Falters

Johnnie Walker whisky maker Diageo said on it expected organic operating profit growth to decline in the first half of its current financial year due to 'materially weaker' performance in Latin America and Caribbean.

Shares in the world's largest spirits company fell 8.5% to 2,970 pence in early trading, making it the top loser on London's blue-chip FTSE index.

'Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading,' the world's biggest spirits company said in a statement.

"These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment."

ADVERTISEMENT

Sales in the Latin America and Caribbean (LAC) market, which generates nearly 11% of total sales, are now expected to decline by more than 20% in the six months ended December, the company added.

Other Regions

Meanwhile in Europe, growth continues to be strong despite geopolitical tensions in the Middle East, albeit the pace is slower than the second half of the previous financial year, Diageo said.

In Asia Pacific, the spirits giant is witnessing momentum with good growth, despite slower than expected recovery in China.

In North America, the company expects gradual improvement in organic net sales growth in the first half of its financial year 2024 compared to the second half of 2023, while maintaining distributor inventory in line with historical levels.

ADVERTISEMENT

It also expects to see improvement in the rate of net sales growth in Africa in this period compared to second half of its 2023 financial year.

For the year ended 30 June, the maker of Tanqueray gin and Don Julio tequila narrowly beat earnings estimates as sales of its more expensive liquor brands offset lower volumes.

News by Reuters, additional reporting by ESM.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.