Diageo reported first-quarter net sales of $4.93 billion, up 1.2% from the same period a year earlier. Organic net sales rose 1.4%, driven by volume growth of 1.1% and a 0.3% improvement in price and product mix. Analysts had expected organic sales to decline 0.4%.
Excluding East African Breweries Limited, organic net sales increased 0.6%. Latin America and the Caribbean grew 4.8%, while Asia Pacific rose 4.1%. Europe, the Middle East and Africa recorded 2.4% growth. India’s sales increased 3.4%, although its Prestige & Above segment, which represents about 90% of sales in the country, grew 7.1%.
North America, which accounts for 36% of Diageo’s net sales, declined 3.6%, a smaller fall than the 6.7% analysts had forecast. Volume dropped 3.7%, partly offset by a 0.1% improvement in price and mix. Double-digit declines in Don Julio, Casamigos and Crown Royal were partly balanced by growth in Johnnie Walker. Diageo said a Casamigos packaging quality issue also affected ready-to-drink spirits performance, while Guinness and Smirnoff Ice ready-to-drink products each grew by double digits.
Chief Executive Sir Dave Lewis said the quarter was in line with expectations and that the company had reiterated its full-year outlook. Diageo continues to identify North America as its biggest challenge, with actions underway to make its offering more competitive.
The company maintained its fiscal 2027 guidance for broadly flat organic net sales growth and low- to mid-single-digit organic operating profit growth. It expects North American organic net sales to fall by a mid-single-digit percentage, assuming the market declines about 3% and Diageo improves its share performance compared with fiscal 2026.
Sources: Investing.com News.