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Diageo’s net sales exceed estimates due to strong US demand
Drinks giant Diageo posted a 16% rise in organic net sales for the year ending 30 June off the back of strong demand for its spirits in the North American market.
As reported by Reuters, the company saw its organic net sales rise by 20% in North America due to strong performances from Casamigos Tequila and Johnnie Walker whisky, as restaurants and bars reopened after months of lockdown.
A trend for trading up in the US also helped to boost the firm’s sales, with rising demand for Casamigos and Johnnie Walker coming off the back of price rises to both brands.
The 16% rise in organic net sales across the company was higher than the 13.7% estimate analysts had predicted. According to Reuters, Diageo is raising its annual dividend by 5% to 44.59 pence per share.
Turkey and Northern Europe both performed well for the drinks giant over the last year, buoyed by strong demand for Scotch in the off-trade.
Meanwhile, the company posted double digit growth in Africa and Asia, leading Diageo to forecast that its sales growth momentum is due to continue into 2022.
However, the spirits market remains volatile due to ongoing lockdowns in India and Indonesia fuelled by rising Covid cases, and alcohol bans in South Africa. The global travel retail market is also a long way off from recovering.