Diageo reports strong sales in Q1

Diageo reports strong sales in Q1

Diageo narrowly beat its own guidance on net sales for the first quarter of its fiscal year, with all business regions reporting growth.

Diageo said today (19 October) that net sales rose by 9% for the three months to the end of September. The increase, which excludes currency swings and includes GBP29m (US$45.6m) of extra sales from newly-acquired Mey Icki, narrowly beat the Smirnoff distiller's initial guidance.

Emerging markets in Latin America, Asia Pacific and Africa continued to drive the drinks maker, with sales in these regions up by 30%, 14% and 9% respectively. 

Meanwhile, there was better news in Europe: Diageo's sales in the hard-hit region rose by 6% on the same quarter of last year, thanks to Eastern European countries, notably Russia, and Germany. In North America, the group reported sales up by 5%, despite a 2% drop in volumes.

Despite the improvement in Europe, Diageo's CEO, Paul Walsh, decribed consumer trends as being "broadly unchanged".

While he said that the group is alert to the fragile global economy, he remains upbeat about the drinks maker's fiscal year. "We continue to expect that net sales growth for the first half will improve on that delivered in fiscal 2011," he said.

On the operating profits level, Diageo said that it expects a bigger hit from currency swings in its full-year than originally expected. No specific guidance was given for full-year operating profits.

For the company's announcement, click here.