Diageo North America Sales Turn Positive In Third Quarter As Global Revenue SlipsApril 16, 2015
Diageo posted a 0.7% global decline in net sales in its third quarter, ended in March, as Asia Pacific (-6%) and Latin America (-10%), two formerly high-flying emerging markets, weighed down results. Diageo’s European sales (-1.3%) were also down in the third quarter, but the drinks giant saw strong growth in Africa (+8%), and, most importantly, a return to positive sales performance in the North American market, which increased nearly 1% for the quarter and 0.2% over the first nine months of Diageo’s fiscal year.
Overall, Diageo said depletions trends improved in the third quarter across both its U.S. spirits and Diageo-Guinness USA units. Recent release Crown Royal Regal Apple was the biggest driver of U.S. gains during the period, while Smirnoff Red showed improved performance and Captain Morgan struggled, the company said.
Diageo’s decline in Asia Pacific during the quarter owed to destocking in South East Asia and political tensions in the Middle East, while its mainland China unit benefited from a rejuvenation of its baijiu portfolio and grew net sales 13%. The Latin American & Caribbean region, meanwhile, saw growth hindered by currency volatility and shipment phasing, which Diageo says will even out in the fourth quarter.
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