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Diageo Full-Year Organic Net Sales Beat Expectations

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Diageo Full-Year Organic Net Sales Beat Expectations

 

Diageo, the leading spirits company, surpassed its full-year sales projections as consumers continued indulging in high-priced scotch, whisky, and tequila despite the premium costs.

In the year ending June 30, the world’s largest spirits maker, renowned for brands like Johnnie Walker whisky, Captain Morgan’s rum, and Ketel One vodka, reported a 6.5% increase in organic net sales, slightly exceeding analysts’ forecasts of a 6.4% rise, according to data provided by the company.

Diageo’s new CEO, Debra Crew, stated in a press release, “We achieved double-digit organic net sales growth in scotch, tequila, and Guinness, with our premium-plus brands contributing 57% of the overall organic net sales growth.” She further highlighted strong growth in Europe and Asia Pacific regions, both experiencing double-digit growth.

The company’s organic net sales growth was driven by a 7.3 percentage point increase in price/mix, although organic sales volumes slightly decreased by 0.8%. Reported volumes, however, saw a more significant decline of 7.4%.

Diageo reported growth in net sales across most categories, particularly in scotch, tequila, and beer, with the premium-plus brands making up a larger share of total sales.

CEO Crew acknowledged the challenges posed by the operating environment in the upcoming fiscal year, citing ongoing cost pressure and uncertainties related to geopolitics and macroeconomics.

To tackle these challenges, the company aims to act with greater speed and agility. Crew’s near-term strategies include focusing on bolder and faster innovation, enhancing operational excellence to meet evolving consumer preferences and driving growth in scotch, tequila, and Guinness segments.

During the same period, Diageo made several acquisitions, including Mr. Black, an Australian coffee liqueur brand, Balcones Distilling, a Texas craft distiller, and Don Papa Rum, a dark rum brand from the Philippines.

 

GSN

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