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Diageo Rises In First Half On Strong U.S. Sales Growth

January 26, 2017

Diageo achieved solid sales growth in the U.S. market in the first half of its fiscal year, driven by significant progress for its top whisk(e)y brands. The spirits giant’s U.S. net sales were up 4% on an organic basis in the six-month period ending December 31, 2016, building on the momentum of the previous fiscal year.

Crown Royal and Bulleit both enjoyed double-digit net sales growth. Crown Royal’s net sales rose by 17%, as Regal Apple’s expansion continued and new addition Crown Royal Vanilla got off to a strong start. Bulleit’s net sales surged by more than 25%. Meanwhile, Johnnie Walker grew by 8%, spurred by marked growth for Black Label and the Scotch brand’s reserve variants.

Cîroc was also on the rise (net sales +6%), as the upscale vodka’s recent flavor launches—including Pineapple in 2014, Apple in 2015 and Mango in 2016—have keyed growth. Progress has proven tougher of late for Smirnoff, but the recent additions of Smirnoff Peppermint Twist and Smirnoff Sourced led to overall depletion growth for the U.S. market’s top-selling vodka line.

Globally, Diageo’s net sales were up 4% on an organic basis (+15% on a reported basis, largely because of positive currency exchange impact). The company’s “global giants,” which comprise more than 40% of overall net sales, rose by 3%, as most posted net sales growth—including Johnnie Walker (+6%), Baileys (+3%), Captain Morgan (+2%) and Tanqueray (+9%). Smirnoff’s global net sales were down by 2%, while Guinness’s were flat. —Peter Zwiebach

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