Diageo’s U.S. Spirits Sales Flat In H1, Despite Growth For Don Julio, Crown Royal
February 5, 2025Diageo saw global sales return to growth on an organic basis in its fiscal first half through December, increasing 1% to $10.9 billion, despite a flat performance for its U.S. spirits portfolio. The world’s leading spirits marketer saw global operating profit decline 1.2% organically to $3.2 billion.
Diageo CEO Debra Crew said the global sales growth came “despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures. Growth in four of our five regions was supported by market share gains. Notably, in North America, we outperformed the market with high-quality share growth and positive organic net sales growth, driven by strong execution and momentum in Don Julio and Crown Royal. I’m also particularly proud of the performance of our iconic Guinness brand, which delivered double-digit growth for an eighth consecutive half.”
Diageo’s North America region—representing 38% of global sales—saw a slight organic increase to $4.1 billion, boosted by a 5% gain by Diageo Beer Co. USA. The core U.S. spirits business was down 4% by volume, but maintained flat sales on a value basis, bolstered by Don Julio (+61%) and Crown Royal (+3%). The only other spirits brand to post organic growth in North America in the first half was Ketel One vodka, which rose 2%, with Smirnoff (-8%), Casamigos (-22%), Johnnie Walker (-13%), Captain Morgan (-12%), Baileys (-13%), Bulleit (-9%), and Buchanan’s (-41%) all seeing declines. Guinness was another bright spot, however, with North America sales jumping 17%.
The company said the portfolio held up relatively well considering “continued softness in the total U.S. spirits industry over the same period. U.S. consumers remained under pressure from cyclical macroeconomic factors including inflation, which, despite easing in recent months, remained elevated compared with historic levels.”
Diageo added that excluding the prospect of U.S. tariffs on Mexico and Canada, it would expect its positive momentum from the first half to carry over for the remainder of its fiscal year ending in June. But it acknowledged that if 25% tariffs on those countries are indeed enacted a month from now as currently scheduled, it could take a $200 million hit in operating profit for the year. The company said it has undertaken “considerable contingency planning” to deal with the potential tariffs, but acknowledged that if they’re put in place the move could impact momentum in its Tequila and Canadian whisky brands.
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