Diageo sales down 10%, but Guinness a bright spot | Real Time Headlines

Spirits giant shares Diageo Shares of Johnnie Walker fell more than 10% Tuesday morning after the maker reported its first sales decline since the outbreak.

The shares were down 8.45% at 10:12am UK time.

The London-based company said organic net sales fell 0.6% for the full year ended June 30, mainly due to weakness in Latin America and the Caribbean. Reported net sales fell 1.4%.

Guinness, the Irish stout that has gained popularity among younger consumers in recent years, in part due to celebrity endorsements, was the main driver of the beer’s overall net sales growth of 18%, the company said. Meanwhile, spirits sales fell 1%.

Guinness achieved double-digit sales growth, mainly due to share gains in Ireland and the UK.

Reflect broader industry trendsnon-alcoholic beer sales are booming, with Guinness 0.0 net sales and volumes more than doubling this fiscal year.

Diageo is also known for brands such as Baileys, Smirnoff, Captain Morgan, Don Julio and Tanqueray.

Chief executive Debra Crew said it had been a “challenging year” for the company and the industry as a whole due to macroeconomic and geopolitical fluctuations.

Crewe said North America faces a cautious consumer environment as well as inventory replenishment issues.

“Diageo’s recent results have been disappointing but not catastrophic,” Chris Beckett, head of equity research at Quilter Cheviot, said in a note. “Revenue has remained fairly stable, down slightly by 1% both overall and in the second half.”

“The situation in Latin America is concerning as it was the main reason for the profit warning issued earlier this year. Economic conditions in the region have exacerbated inventory issues, resulting in a significant decline in margins.”