Drinks firm Diageo reported full-year sales up 21.4% as more people drank expensive spirits and bars reopened after pandemic lockdowns last year.
Reported net sales rose to £15.5 billion (€18.56 billion) in the year to June 30, beating the 16.1% increase analysts had been expecting, according to Refinitiv.
The world's largest spirits maker, which makes Johnnie Walker whiskey, Tanqueray gin, and Captain Morgan's rum among others, said its high-end brands contributed 57% of reported net sales.
Diageo has benefited since the start of the pandemic from people trading up to more expensive types of alcohol, investing in its high-end portfolio of drinks along the way, it said.
The group has also signalled its intent to wind-down its Russia operations by year-end.
On-Trade Recovery
The company said that its 'growth reflected the continued recovery of the on-trade, resilient consumer demand in the off-trade and market share gains, and was underpinned by favourable industry trends of spirits taking share of total beverage alcohol and premiumisation'.
Reported operating profit was up 18.2%, primarily driven by organic operating profit growth, while it noted that price increases and productivity savings 'more than offset' the impact of cost inflation on its margins.
“I am very pleased with our fiscal 22 results," Ivan Menezes, Diageo chief executive, commented. "We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85% of our total net sales value in measured markets."
Looking Ahead
Looking ahead to the coming financial year, Menezes added that he believed the operating environment to be "challenging", due to "ongoing volatility related to COVID-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty.
"Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds."
Read More: Diageo Names New Chief Operating Officer, North America President
News by Reuters, edited by ESM. For more drinks news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine
