Johnnie Walker owner Diageo toasts surging sales amid spirits boost
The FTSE 100 company witnessed 9% organic growth and also benefited from price increases over the half-year.
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Your support makes all the difference.Guinness maker Diageo has beaten expectations with surging sales and boosted profits as consumers splashed out on higher-priced and premium tipples.
But the spirits and beer firm saw shares slip in early trading after cautioning that sales growth had slowed down in North America and other key regions.
It came as sales by the firm, which also owns Johnnie Walker, Smirnoff and Baileys, grew 18% to £9.4 billion over the second half of 2022, compared with the previous year.
Guinness is still growing very strongly and became the top beer in British pubs as a result of the brand continuing to resonate
The FTSE 100 company witnessed 9% organic growth and also benefited from price increases over the half-year.
Diageo said sales growth in Europe was driven by increased prices of its spirits and rolling out more premium brands over the year.
It attempted to reassure investors that pricey spirits were “affordable luxuries” that could withstand a financial downturn.
Sales of whisky brand Johnnie Walker surged by nearly a quarter in the region during the six-month period, while the recent boom for Guinness continued, with demand for the Irish stout jumping by a fifth.
Sales have been really resilient and that is exactly the same across premium categories
Diageo chief financial officer Lavanya Chandrashekar told the PA news agency that the brand became the best selling beer in UK pubs over the period.
“Guinness is still growing very strongly and became the top beer in British pubs as a result of the brand continuing to resonate,” she said.
“Sales have been really resilient and that is exactly the same across premium categories.”
Guinness helped drive a 1% increase in net sales in Great Britain over the half-year, supported by the benefit of higher pricing.
As we look to the second half of fiscal 2023, whilst the operating environment remains challenging, I remain confident in the resilience of our business and our ability to navigate volatility
Spirit sales in the UK were lower, as growth in vodka was more than offset by tumbling gin sales.
Diageo revealed that sales in some regions, such as North America, had slowed down during the half-year.
Ivan Menezes, chief executive of Diageo, said: “We have delivered targeted price increases across all regions, enabled by our expertise in revenue growth management and supported by strong consumer demand for our brands.
“As we look to the second half of fiscal 2023, whilst the operating environment remains challenging, I remain confident in the resilience of our business and our ability to navigate volatility.”
Shares in the company were down 4.6% at 3,505.5p following the update.