Diageo FY sales fall 1.4% amid weaker demand in Latin America
Diageo is the owner of alcohol brands such as Guinness, Johnny Walker, Tanqueray, Smirnoff and Baileys
Diageo has revealed that its reported net sales fell 1.4% to $20.3bn(£15.8bn) for the year ended 30 June 2024.
The company has put this down to an unfavourable foreign exchange impact and organic net sales decline, partially offset by hyperinflation adjustments.
Its organic net sales declined by $129m (£100.4m) or 0.6%, primarily driven by a 21.1% decline in its Latin America and Caribbean region (LAC).
Diageo’s organic operating profit declined by $304m (£236.6m) or 4.8%, of which $302m (£235m) was attributable to LAC.
Despite this, its reported operating profit grew 8.2% primarily due to the positive impact of exceptional operating items partially offset by a decline in organic operating margin.
Debra Crew, chief executive, said: ”While fiscal 24 was a challenging year for both our industry and Diageo with continued macroeconomic and geopolitical volatility, we focused on taking the actions needed to ensure Diageo is well-positioned for growth as the consumer environment improves.
“Fiscal 24 was impacted by materially weaker performance in LAC. Excluding LAC, organic net sales grew 1.8%, driven by resilient growth in our Africa, Asia Pacific and Europe regions. This offset the decline in North America, which was attributable to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year.In fiscal 24 we made good progress against our strategic priorities.”
She added: “We ended fiscal 24 gaining or holding share in measured markets totalling over 75% of our net sales value, including in the US. We have taken actions to manage the inventory issues in LAC; we have strengthened our consumer insights and redeployed resources towards the best growth opportunities.
“We have stepped up our route-to-market across several markets, including our most significant transformation in at least a decade in our US Spirits organisation; we have delivered record productivity savings of nearly $700m; and we have generated $2.6bn in free cash flow while increasing strategic investments. We are confident that when the consumer environment improves, the actions we are taking will return us to growth.”
Diageo is the owner of alcohol brands such as Guinness, Johnny Walker, Tanqueray, Smirnoff and Baileys.