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Diageo, the world's largest spirits maker, has reported a 1.2 percent rise in net sales to $4,931 million in the first quarter of its financial year, as growth in most regions offset a fall in North America. Organic net sales, which strip out currency and acquisitions, rose 1.4 percent including its East African Breweries business, and 0.6 percent excluding it. Volumes fell 0.1 percent excluding East African Breweries, while price and mix added 0.7 percent, showing that the company sold slightly fewer drinks but at higher prices.
North America was the weakest region, with organic net sales down 3.6 percent and sales in the United States down 3.7 percent, as consumers cut back on spending and as distributors reduced their stock. In contrast, Asia Pacific grew 4.1 percent, India rose 3.4 percent, Europe, the Middle East and Africa increased 2.4 percent, and Latin America and the Caribbean grew 4.8 percent. Whisky grew as a category, reflecting continued demand for Scotch and other whiskies around the world.
Diageo owns some of the world's best-known drinks brands, including Johnnie Walker, Smirnoff, Guinness, Baileys and Captain Morgan. Its business is spread across more than 180 countries, which helps it to weather weakness in any one market. The company has been investing in its brands, in new products and in its supply chain, while also working to manage costs as inflation and higher interest rates affect consumers.
For the full 2027 financial year, Diageo kept its guidance unchanged, expecting organic net sales to be broadly flat and organic operating profit to grow at a low to mid-single-digit rate. It also expects free cash flow of around $2 billion, down from $3.2 billion in 2026, as it invests in its business and manages its working capital. The company said it was focused on improving its performance in North America while continuing to grow in other regions.
For the drinks industry, Diageo's results show a market that is still growing in most parts of the world, but where consumers in the United States are under pressure. The company's diversified portfolio and its global reach give it resilience, and its guidance suggests it expects a steady year. Investors will look for signs of a recovery in North America when the company reports its half-year results early next year.
Source: TradingView
