GLOBAL: Diageo cautious despite Q1 sales rise
- Emerging markets boost Q1 sales
- Europe still weak, North America improves
- Performance in-line with expectations
Diageo saw like-for-like sales rise by 5% in Q1
Strong demand in emerging markets continued to boost Diageo's sales in the first quarter of its new fiscal year, but the Guinness brewer remains cautious on Europe and North America.
Diageo's like-for-like sales, excluding exchange rate swings, rose by 5% for the three months to the end of September, compared to the same period of last year. Sales reached GBP2bn (US$3.2bn).
"Our first quarter performance is in line with our expectations with good volume growth and a modest improvement in the level of price/mix," said Diageo's CEO, Paul Walsh. Analysts reacted positively to the results.
Thirst for beer in Africa, as well as Scotch whisky in Asia and Latin America continued to fuel the Johnnie Walker distiller's performance. In Europe, sales in Greece and Spain fell "markedly" and consumer demand across the continent was "slightly weaker" than last year. North America showed stronger growth, the group added.
Diageo remained cautious in its outlook. It said that like-for-like operating profits for the year would grow more strongly than in the previous year, which saw a 2% increase, but it declined to give a specific range.
"We continue to increase marketing spend behind our brands globally and build our capabilities and our sales force in the developing markets," said the firm, which also owns Smirnoff.
For analyst comment on the results, click here.
The second part of March's management briefing sees Ben Cooper spread his net further afield, and consider the corporate social responsibility approach within the European Union....
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