Diageo reports “weak” sales
Diageo, owner of the Smirnoff, Guinness and Captain Morgan brands, says sales fell 6% in its first quarter but has maintained its full-year profit guidance.
The drinks maker says net sales have been “weak” in the three months to 30 September when compared to robust sales in the same period last year.
Paul Walsh, chief executive of Diageo, says: “As we anticipated, consumer trends across our markets remain broadly unchanged since the year-end.”
Despite the drop in sales, the company reiterated its forecast for “low single digit” organic growth in operating profit in financial year 2009/2010.
Diageo adds the restructuring programme that aims to deliver £120m in cost savings is “on-track”, helped by “efficiencies in marketing spend and media rate deflation”.
Global marketing dropped 9% in the full-year to June 30, which the company claimed was also due to media deflation.
Shares in the drinks maker were down 2.76% this morning (14 October) following the statement. The trading update came ahead of its annual general meeting later today.
