According to recent reports, the drinks giant saw a 10.7% increase in reported sales, reaching £17.1 billion (€20 billion) for the year ending June 30. This growth was driven by double-digit sales growth in scotch, tequila, and Guinness, as well as benefits from a stronger US dollar. Organic sales also saw a 6.5% increase, with premium-plus brands accounting for 57% of the growth.
Additionally, reported operating profit rose by 5% to £4.6 billion (€5.4 billion), despite a decline in reported operating margin. The company attributed this decline to exceptional operating items and favorable exchange rates. Diageo also reported that price increases implemented throughout the year more than offset the impact of cost inflation on gross margins. However, there was a decrease of 7.4% in volumes over the year.
During its financial year, Diageo observed a 16% increase in net sales in Ireland, primarily due to strong growth in Guinness sales within the recovering hospitality industry. The company also experienced strong price increases across all European markets, resulting in an 11% growth in organic sales.
Diageo achieved growth in four out of five active regions, particularly in Europe and the Asia Pacific, which reported double-digit increases. However, organic net sales remained flat in North America, as growth in Canada and the Diageo Beer Company USA was offset by a decline in the US spirits division, with sales down by 1%.
Looking forward, Diageo anticipates accelerating organic net sales growth in the first half of its current financial year, after experiencing more moderate revenues in the second half of the previous year. Despite challenging macro environments, the company remains resilient and continues to deliver consistent performance.
Chief Executive Debra Crew expressed confidence in Diageo’s ability to navigate the challenging inflation environment, stating that strategic pricing changes will persist. However, she acknowledged that ongoing geopolitical and macroeconomic uncertainty may pose challenges in the operating environment for fiscal year 2024.
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