DIAGEO DELIVERS GROWTH IN A SLOWING MARKET
It’s no secret that spirits growth is seeing a slight slowdown in the US, but Diageo still managed to outperform the market in its fiscal year results. In the year ending June 30, Diageo said that an increased focus on priority brands delivered strong top-line and bottom-line growth in North America, while operating margins also saw improvement. Overall volume for the continent grew 3%, while net sales were up 7%. Meanwhile, marketing spend rose 5% and operating profit increased 12%.
“In North America we outperformed the US spirits market for the third consecutive year,” said chief Paul Walsh.
Remember that Diageo raised its forecast for annual operating profit to 8% in February on sales of Johnnie Walker Scotch whisky and Smirnoff vodka in the U.S. and Asia. The company managed to beat its forecast, with earnings rising 8.7% helped by price increases and heavier advertising.
Volume growth of spirits was 3%, while wine grew 6% and beer jumped 7%. A combination of mix improvements and price increases on approximately 50% of the volume resulted in net sales for spirits, wine and beer to grow 8% in North America. Meanwhile, RTD net sales were down
-1% and volume declined -6%. Smirnoff vodka and Baileys each delivered double digit net sales growth, while Crown Royal saw organic volume rise 5% and organic net sales increase 9%.
Smirnoff vodka volume was particularly strong in North America, the company said, which accounts for over 40% of total Smirnoff sales.
UNITED STATES. Diageo’s value share of the spirits market in the US grew 0.6 percentage points, while the value share of premium wine grew 0.6ppts. The US saw price/mix improvements in spirits, beer, wine and RTDs.
Diageo said it would continue “focusing on priority brands and building brand image in the US” as consumers continue to seek out “sophistication and image.”
Stay tuned tomorrow for further coverage...
“In North America we outperformed the US spirits market for the third consecutive year,” said chief Paul Walsh.
Remember that Diageo raised its forecast for annual operating profit to 8% in February on sales of Johnnie Walker Scotch whisky and Smirnoff vodka in the U.S. and Asia. The company managed to beat its forecast, with earnings rising 8.7% helped by price increases and heavier advertising.
Volume growth of spirits was 3%, while wine grew 6% and beer jumped 7%. A combination of mix improvements and price increases on approximately 50% of the volume resulted in net sales for spirits, wine and beer to grow 8% in North America. Meanwhile, RTD net sales were down
-1% and volume declined -6%. Smirnoff vodka and Baileys each delivered double digit net sales growth, while Crown Royal saw organic volume rise 5% and organic net sales increase 9%.
Smirnoff vodka volume was particularly strong in North America, the company said, which accounts for over 40% of total Smirnoff sales.
UNITED STATES. Diageo’s value share of the spirits market in the US grew 0.6 percentage points, while the value share of premium wine grew 0.6ppts. The US saw price/mix improvements in spirits, beer, wine and RTDs.
Diageo said it would continue “focusing on priority brands and building brand image in the US” as consumers continue to seek out “sophistication and image.”
Stay tuned tomorrow for further coverage...
posted at 12:51 PM
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