Diageo, the renowned maker of Johnnie Walker scotch whisky, Guinness stout, and Smirnoff vodka, has announced a decrease in profit for the first half of its fiscal year 2024. The decline was primarily attributed to a sharp drop in sales within the Latin American and Caribbean regions, which account for 11% of the company's total revenue.
In its latest earnings release, Diageo reported a pretax profit of $3.08 billion for the six months ending on December 31. This figure represents a notable decrease from the $3.60 billion recorded during the same period the previous year. The decline in profit can be attributed to various factors, including lower consumption and consumer downtrading due to macroeconomic pressures in the region.
Organic Net Sales
Diageo's organic net sales experienced a decline of 0.6%, falling short of the market expectations of flat growth. This decline was primarily driven by a 9% decrease in sales volume. The company acknowledged that the Latin American and Caribbean divisions played a significant role in this decline, citing both a challenging comparison to strong net sales growth in the previous period and unfavorable macroeconomic conditions.
Despite facing challenges in certain regions, Diageo remains a prominent player in the global alcoholic beverages market. As the company moves forward, it will undoubtedly focus on adapting to changing market dynamics while leveraging its diverse portfolio of renowned brands.
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