Analysis - Developed markets strong for Diageo in Q1, emerging markets weaker
One analyst asks Diageo: Isn't it ironic?
Diageo's performance in its first quarter carries a hint of irony for one analyst, who has highlighted better developed markets numbers versus weakening emerging markets for the group.
Earlier today (17 October), Diageo reported a 3.1% lift in sales for the three months to the end of September. While the Latin American & Caribbean and North America divisions posted 10.9% and 5.1% growth, respectively, Africa, Eastern Europe & Turkey and Asia-Pacific performed less impressively, with sales from the units rising by 1.3% and 0.6%.
In a note this morning, Investec re-stated its 'Sell' recommendation for Diageo. "The story of the update is weakening emerging markets (EMs), consistent with our sell thesis that EM’s are set to make life difficult for Diageo for a while," the analyst said.
"The irony of the Q1 - mirroring trends seen elsewhere - is that developed markets came in slightly ahead of expectations."
Investec said it reads the first quarter as a miss for Diageo, citing consensus expectation of 4% sales growth. "We expect the FY14 organic growth consensus of 5.3% to come under pressure this morning."
UBS, meanwhile, agreed that the performance was "softer than expected", but noted that "Q1 is a small quarter representing circa 20% of annual sales". The analyst lowered its full-year organic sales growth forecast from 5.3% to 4.9%.
Diageo's is targetting sales growth of 6% per year in the medium term, a position it reiterated in its results today.
As we start our annual series of management briefings that focus on environmental sustainability, Ben Cooper looks at the importance of integrating the issue into all aspect of a company's operations ...
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
In the second part of this month's management briefing, which shines the light on the importance of environmental sustainability in the brewing industry, Ben Cooper considers the impact of stakeholder...
"The Future of the Wine Market in the United Arab Emirates to 2017: Market Size, Distribution and Brand Share, Key Events and Competitive Landscape" is the result of Canadean’s extensive market and co...
In the third part of this month's management briefing, Ben Cooper reviews the environmental sustainability of three of the world's biggest brewers: Anheuser-Busch InBev, Carlsberg and Diageo....
India’s largest spirits producer, UB Group’s United Spirits, came under the control of global leader, Diageo, in 2013. The profile analyses the most promising ways forward for United Spirits’ strong d...
Business Monitor International's Cameroon Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory ...
- AB InBev, SABMiller - Here's what'll happen next
- Is time right for TWE to move for Diageo's wines?
- Will a sexed-up SABMiller tempt AB InBev?
- Is Brown-Forman at the end of the SoCo road?
- Making consumers the centre of your business
- AB InBev makes formal offer for SABMiller
- Diageo makes US$780.5m beer deal with Heineken
- SABMiller formally rejects AB InBev's offer
- Brito gives call to arms to SABMiller shareholders
- Carlsberg UK chief James Lousada quits
- The IWSR Duty Free/Travel Retail Summary Report 2015
- Future growth opportunities for global spirits
- Global gin insights - market data, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research