Diageo CEO gets quarterly sales boost in first stage of turnaround
DEO•Diageo reported 0.6% organic net sales growth for the three months ended September 30, versus analysts’ expected 0.4% decline. North American organic sales fell 3.6%, less than the expected 6.7% drop.
1. Sales turn higher
Diageo posted an unexpected first-quarter sales rise as declines in its North American business slowed. Shares rose 3.5%. CEO Dave Lewis called the results “a small step in the right direction,” while saying market conditions remained tough and the North American business was still the group’s biggest challenge.
2. North America details
Diageo attributed the North American result partly to growth in Guinness beer and Johnnie Walker whisky and to “shipment phasing.” Analysts said the better-than-expected performance reflected shipment timing rather than the company’s initiatives; Don Julio and Casamigos tequila and Crown Royal whisky had double-digit declines. Including East African Breweries, which Diageo is selling its majority stake in to Asahi Holdings, group sales rose 1.4%.
