Canada markets closed
  • S&P/TSX

    18,441.84
    -207.08 (-1.11%)
     
  • S&P 500

    3,640.47
    -78.57 (-2.11%)
     
  • DOW

    29,225.61
    -458.13 (-1.54%)
     
  • CAD/USD

    0.7313
    +0.0002 (+0.03%)
     
  • CRUDE OIL

    81.56
    +0.33 (+0.41%)
     
  • BTC-CAD

    26,650.85
    -208.21 (-0.78%)
     
  • CMC Crypto 200

    444.40
    -1.58 (-0.35%)
     
  • GOLD FUTURES

    1,670.90
    +2.30 (+0.14%)
     
  • RUSSELL 2000

    1,674.93
    -40.31 (-2.35%)
     
  • 10-Yr Bond

    3.7470
    +0.0420 (+1.13%)
     
  • NASDAQ futures

    11,246.50
    +18.25 (+0.16%)
     
  • VOLATILITY

    31.84
    +1.66 (+5.50%)
     
  • FTSE

    6,881.59
    -123.80 (-1.77%)
     
  • NIKKEI 225

    26,422.05
    +248.07 (+0.95%)
     
  • CAD/EUR

    0.7442
    0.0000 (0.00%)
     

Diageo sales top forecast as drinkers go upmarket

·1 min read
A bottle of Johnnie Walker whisky, a brand of Diageo, is seen for sale in Manhattan, New York City

By Richa Naidu

LONDON (Reuters) -Johnnie Walker whisky maker Diageo beat annual sales forecasts on Thursday as more people drank expensive spirits and bars reopened after pandemic lockdowns the previous year.

The world's largest spirits maker, which also makes Tanqueray gin, Captain Morgan's rum and Ketel One vodka, said net sales jumped 21.4% to 15.5 billion pounds ($18.9 billion) in the year to June 30, beating analyst forecasts for a 16.1% rise.

Diageo has benefited since the start of the pandemic from drinkers trading up to more expensive types of alcohol, investing along the way in its premium brands such as Bulleit Bourbon and Don Julio tequila.

"Consumers are choosing to drink better, and that's leading to the premiumization of the category," Diageo's head of finance, Lavanya Chandrashekar, said.

The company said its high-end brands contributed 57% of reported net sales.

Its shares were up 0.9% in early trading.

For the new financial year, though, Diageo sounded a note of caution.

"Looking ahead to fiscal '23, we expect the operating environment to be challenging, with ongoing volatility related to COVID-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty," Chief Executive Ivan Menezes said.

Diageo said it was able to raise prices to "more than offset" its cost inflation of roughly 7-8% since the start of the Russia's invasion of Ukraine. That cost inflation is not expected to abate this financial year, Diageo said.

($1 = 0.8213 pounds)

(Reporting by Richa NaiduEditing by David Goodman and Mark Potter)