Diageo’s First Half Profit Falls By 18% As Most Top Brands Suffer Sales DeclinesJanuary 29, 2015
Diageo’s net profit fell by 18% in its fiscal first half (ended December 31, 2014), as the drinks giant’s North American sales slipped by 2% and its struggles in Asia continued. Diageo’s global drinks volume declined 2% on an organic basis, while its net sales were down 1%, to £5.9 billion ($8.9b) on a reported basis.
Top brands Smirnoff, Johnnie Walker, Captain Morgan and Baileys all endured global net sales declines, as did Guinness. While Smirnoff, Captain Morgan and Johnnie Walker struggled in the U.S. market in Diageo’s fiscal first half, other brands fared well. New product activity on both Cîroc (with Cîroc Pineapple) and Crown Royal (Crown Royal Regal Apple) led to respective 6% and 3% sales growth for the company’s vodka and North American whisk(e)y businesses, while Diageo’s reserve brands enjoyed a 10% bounce, thanks to solid progress from Don Julio Tequila (net sales up 21%) and Bulleit Bourbon (+59%). Additionally, while Diageo’s Scotch shipments to the U.S. were down by 9%, Buchanan’s continued to thrive, as its strong connection with the Hispanic community propelled the brand to a 33% net sales increase.
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