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Diageo Posts 16% Rise In First-Half Sales

Diageo, the maker of Johnnie Walker and Tanqueray gin, on Thursday said that first-half sales rose nearly 16% as more consumers bought high-end spirits and bars increased orders as they reopened after coronavirus lockdowns.

Operating profit increased by 22.5% to £2.7 billion ($3.62 billion) in the six months to 31 December, with its operating margin up by 190 basis points, Diageo said.

Net sales rose 15.8% to £8 billion.

Off- Trade Sales Increase

The world's largest spirits maker has benefited from shoppers stocking up on spirits and beers at home during the COVID-19 pandemic, often trading up to more expensive types of alcohol.

Then as lockdowns have eased, particularly Europe and North America, bars have had to restock, buying more than the previous year.

Rival Rémy Cointreau this week said it is confident demand for its premium cognac in China, the United States and Europe will underpin profit growth this year after the French spirits group beat quarterly sales forecasts.

European Beverages Sector

The European beverages sector outperformed the wider market almost uniformly in the fourth quarter, Bernstein analysts said.

The distillers led the way while global brewers were more subdued because of rising raw material costs.

Shares in Diageo have repeatedly touched record highs since the company said in November that it expects organic net sales growth to be between 5% and 7% for its 2023-2025 financial years, against 4% to 6% growth over 2017-2019.

On Thursday the shares were up 1.3% at £36.92.

News by Reuters edited by Donna Ahern, Checkout. For more Drinks stories click here. Click subscribe to sign up for the Checkout print edition.

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