Diageo Sees Lower Organic Net Sales Growth Due To Trade Uncertainty
Published on Jan 30 2020 8:54 AM
Diageo Plc, the world's largest spirits company, on Thursday said it expects annual organic net sales growth to be at the lower end of its previous forecast as it faces the fall-out from increasing global trade uncertainty.
The company now expects full-year organic net sales growth to be at the lower end of the 4% to 6% range it previously forecasted. The company highlighted volatility in India, Latin America and the Caribbean.
The maker of Johnnie Walker Scotch whisky, Smirnoff vodka and Guinness stout said operating profit rose 0.5% to £2.44 billion (€2.88 billion) for the six months ended Dec. 31.
First-half organic operating profit grew 4.6%.
"Diageo has delivered another good, consistent set of results in the first half, with broad based organic net sales growth across regions and categories," commented Ivan Menezes, Diageo chief executive. "We have continued to increase investment behind marketing and growth initiatives, while expanding organic operating margins."
Diageo has faced pressure from U.S. President Donald Trump's use of tariffs as a weapon in trade conflicts after the United States slapped a 25% tariff on scotch whisky and other European products.
"There is ongoing uncertainty in the global trade environment and we would not be immune from further policy changes," Menezes added. "We remain focused on building the long-term health of our brands, supported by data-led insights and a culture of everyday efficiency."