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Diageo’s U.S. Sales Rise 3%, As Whisk(e)y Growth Offsets Vodka Struggles

July 26, 2018

Diageo has posted a 3% increase in its U.S. business for the 12 months through June, as solid growth across a number of whisk(e)y brands overcame ongoing softness in the vodka category.Whisk(e)y growth was led by Crown Royal, which saw organic net sales rise 3% in North America, as well as Johnnie Walker (+8%) and Bulleit (+10%). Crown Royal Deluxe and Regal Apple led the way for the Canadian whisky franchise, while Johnnie Walker enjoyed double-digit progress within its Reserve tier, partially driven by the high-end Blue Label.

While vodka continues to be a struggle, with top brand Smirnoff down 2% on an organic basis in North America for the year, Diageo noted that Ketel One (-2%) and Cîroc (-4%) have showed improvement in their trends lately. Captain Morgan also declined in North America during the fiscal year, with sales down 1%, but Don Julio Tequila (+37%) and Baileys (+11%) enjoyed strong growth. Overall, Diageo’s North America net sales rose 4% to £4.2 billion ($5.5b) on an organic basis, while operating profit increased 2% to £1.9 billion ($2.5b).

Globally, Diageo’s net sales were up 5% to £12.2 billion ($16b), and operating profit increased 7.6% to £3.7 billion ($5b). In line with the solid results, the drinks giant said its board has approved a share buyback program of up to £2 billion ($2.6b) for its current fiscal year, which ends next June.—Daniel Marsteller

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