Drinks giant Diageo lowers sales target amid trade tensions
Beverage behemoth Diageo’s net sales grew by four per cent in the final sixth months of 2019, boosted by growth in the North America and Asia Pacific regions.
However, the Guinness-maker cut its sales forecast for the year to June to the lower end of its four to six per cent target as it cited “ongoing uncertainty in the global trade environment”.
The figures
Operating profit at Diageo – which makes drinks ranging from Johnnie Walker whisky to Smirnoff vodka – rose 0.5 per cent year on year in the final six months of 2019 to £2.44bn.
Net sales rose four per cent in the same period, hitting £7.2bn.
Basic earnings per share slipped, however, to 79.2p from 80.9p a year earlier.
Diageo’s net cash from operating activities was £1.3bn, £300m lower than in the prior period.
The interim dividend increased five per cent to 27.41p per share.
Why it’s interesting
Global trade tensions caused strong headwinds for multinationals such as Diageo in 2019, causing many to fear what 2020 will bring.
Despite the signing of a “phase one” trade deal between the US and China, Diageo today said uncertainty would continue to weigh on its sales.
What Diageo said
Chief executive Ivan Menezes said: “There is ongoing uncertainty in the global trade environment and we would not be immune from further policy changes.
“We remain focused on building the long-term health of our brands, supported by data-led insights and a culture of everyday efficiency.”