Market

Diageo Shares Slide After LatAm Hangover


Guinness

Shares in Diageo (DGE) fell sharply today after it downgraded its outlook for the year ending June 30, 2024, amid a weak performance outlook in the Latin America & Caribbean (LAC) market. It had been expecting to see a gradual improvement in organic net sales growth over its first half.

The company’s shares are down 15% today to £27.57, a rare one-day move for a FTSE 100 company. Diageo has fallen 23% in 2023 so far.

However, while momentum continues in four of its five regions, the Guinness and Smirnoff maker warns that growth in the first half of financial 2024 will be slower than the second half of financial 2023. Sales in the LAC market are nearly 11% of its net sales value, and are expected to fall by 20% year-on-year on an organic basis over the first half.

“Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading. These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment,” it explained. Consequently, organic operating profit growth for the first half of its financial year will decline from the prior year. It expects to see a “gradual” improvement in organic net sales and operating profit growth in the second half of financial 2024 compared to the first half.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person’s sole basis for making an investment decision. Please contact your financial professional before making an investment decision.



READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.