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Diageo Sees Improvement In U.S., But Warns Of Tough Comps Over Remainder Of 2015

September 23, 2015

After reporting a 1% organic decline to £3.5 billion ($5.3b) in North America sales in its fiscal year ending in June, Diageo has stated that its performance has improved so far in its new fiscal, but cautioned that tough comparables in the U.S. could end up weighing down its first-half 2015-2016 results.

Diageo CEO Ivan Menezes said company volume is up mid-single digits since the end of June, “reflecting both improved volume growth trends and comparison against weakness at the start of last year. We have continued to deliver positive mix but, as we expected, price increases have been muted.”

Menezes added that increasingly tough year-on-year comparisons will come into play as the first-half moves along, “particularly relating to innovations in U.S. spirits,” and said Diageo’s first-half guidance of a 2% organic decline in North America net sales was unchanged. He went on to note that currency issues could affect demand in emerging markets over the course of the current fiscal year, creating further difficulties amid a broad emerging market slowdown.

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