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."
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.
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 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.
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.