Diageo Plc, the world’s biggest distiller, reported slower first-quarter revenue growth than analysts expected amid weaker sales in Asia.
Organic net revenue in the three months ended 30 September fell 1.5 per cent, the London-based maker of Guinness stout said today in a statement, trailing the median estimate of 13 analysts for a 1 per cent decline.
“Consumer trends in most markets are unchanged and our first quarter performance is in line with our expectations,” Chief Executive Officer Ivan Menezes said in the statement. Menezes is grappling with a raft of challenges around the globe, from a slowdown in Smirnoff vodka in the US to tax hikes on beer in Kenya. Chinese government cutbacks on extravagant spending have also weighed on sales of Diageo’s clear spirit Shui Jing Fang and led to a writedown at its business there last year. Sales fell 7.4 per cent in Asia, missing the 4.5 per cent drop anticipated by analysts.
In North America, Diageo’s biggest division, sales increased 0.1 per cent, while revenue in the European unit, which now includes Eastern Europe and Turkey, declined 1.4 per cent, missing estimates. Diageo, which derives 28 per cent of net sales from Scotch whisky, was buoyed by Scotland’s decision last month to remain in the UK, yet Scotch exports declined 11 per cent in the first six months of 2014, according to the Scotch Whisky Association.
Diageo fell 1 per cent to 1,709.5 pence in London yesterday, and has declined 15 per cent this year.
Bloomberg News, edited by ESM
