Diageo net sales up 9.4% in half year
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The world’s largest producer of alcoholic beverages, Diageo, has published reporting for the first half of the fiscal year 2023 ending December 31. Diageo’s net sales for the period were £9.4bn, up 9.4% compared to the first half of fiscal year 2022. Analysts had forecast growth of 7.9%. Half-year operating profit rose 9.7% to £3.2bn.
Sales of Diageo products grew in all regions of the world, although in North America their growth fell short of analysts’ forecasts – 3% vs. 6%. At the same time, the main growth in sales came from expensive brands costing an average of £50 per bottle, their share in the company’s sales amounted to 65%. As Diageo CEO Ivan Menezes noted, “People are enjoying alcoholic beverages even more than before, but not drinking more, but drinking better.” Thus, consumers began to drink more tequila, Scotch whiskey and Guinness beer. In addition, the return of people to pubs, bars and restaurants after the lifting of pandemic restrictions in most regions of the world had a positive impact on the results.
According to Mr. Menezes, “Diageo is now 36% larger than it was before the COVID-19 pandemic.” In the second half of the current fiscal year, the company expects net sales to grow by 5-7% and operating profit to grow by 6-9%. Shares of Diageo at the auctions in London reacted to the publication of financial statements by falling by 6.4%.
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