Diageo Posts U.S. Sales Up 1.6% In Full Fiscal Year 

Diageo saw global sales climb 1.7% organically to $20 billion in its fiscal year ended in June, as operating profit before exceptional items dipped 0.7% to $5.7 billion. On a reported basis, net sales were roughly flat and operating profit fell 28% as currency effects and overhead investments ate into the company’s results. The North America region, accounting for just under 40% of global sales, was up 1.5% to $8 billion for the year.

Diageo’s U.S. spirits sales grew 1.6% during the year with a positive price/mix of 2.9%, partially offset by a volume decline of 1.3%, with shipments slightly ahead of depletions as distributors restocked on Don Julio and Crown Royal. “In the U.S., our spirits route-to-market has benefited from increased investment in capability building, commercial execution, and investing in key accounts, and we are seeing early signs of incremental growth,” the company noted.

Don Julio saw U.S. depletions jump 36% during the year, with net sales up 42%, offsetting an 18% decline for Casamigos. Crown Royal’s net sales increased 4%, while Bulleit, the vodka portfolio, Johnnie Walker, Buchanan’s, and Captain Morgan all declined.

“While we are encouraged by areas of progress and the standout performance from Don Julio, Guinness, and Crown Royal Blackberry, there is clearly much more to do across our broader portfolio and brands,” said Diageo’s interim CEO Nik Jhangiani. “We recognize the need to drive meaningful growth opportunities in an evolving TBA landscape, and we are sharpening our strategy to accelerate growth.

“While macroeconomic uncertainty and the resulting pressure on consumers continues to weigh on the spirits sector, we believe in the attractive long-term fundamentals of our industry and in our ability to continue to outperform as the TBA landscape evolves,” he added. “We are focused on what we can manage and control and executing at pace.”

Addressing the issue of tariffs, Diageo said it now expects a $200 million impact to its business, “assuming the current 10% tariff remains on UK and 15% European imports into the U.S., that Mexican and Canadian spirits imports into the U.S. remain exempt under the United States–Mexico–Canada Agreement (USMCA), and that there are no other changes to tariffs.”—Daniel Marsteller

Tagged : Buchanan's, Bulleit, Captain Morgan, Casamigos, Crown Royal, Diageo, Don Julio, Johnnie Walker, Ketel One, Smirnoff

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