Diageo Stocks Fell on November 10th
Diageo Stocks Fell on November 10th a bearish market in the world of alcoholic beverages.
In this regard, Diageo’s shares fell by as much as 16% this Friday after the whisky maker Johnnie Walker stated that it expected a drop in first-half operating profit growth due to “significantly weaker performance” in Latin America and the Caribbean.
Sales in the region, which generate nearly 11% of Diageo’s total, are expected to fall by more than 20% in the six months ending in December, added the maker of Tanqueray gin and Don Julio tequila.
While Diageo’s shares dropped, some analysts estimate, as the manufacturer itself does, that there is a decline in consumption.
“Macroeconomic pressures in the region are translating into reduced consumption and a downward trend in consumption,” said the world’s largest producer of spirits.
“These impacts are slowing progress in reducing channel inventory to levels appropriate for the current environment,” added the company in a statement.
Diageo Stocks Fell
Diageo shares fell by up to 16%, its biggest one-day drop since 1987, trading at 2,762 pence at 11:37 GMT.
Last month, Mexican company Becle, the world’s largest tequila producer, had stated that economic issues in Europe and Latin America were slowing consumer spending on alcoholic beverages, affecting its profits.
Meanwhile, in Europe, Diageo stated that growth remains strong despite geopolitical tensions in the Middle East, although the pace is slower than in the second half of its previous fiscal year, which ended on June 30.
“Over time, as inflation moderates, and the productivity of our supply agility program flows through, we expect operating profit to grow ahead of organic net sales,” said Diageo.
Diageo narrowly exceeded earnings estimates for the fiscal year ending on June 30, as sales of its premium liquor brands offset lower volumes.
The decline in Diageo’s stocks has affected many of its competitors. For example, Pernod Ricard is down over 4% in the French market, while Italian Davide Campari-Milano retreats by 3.7%, and Remy Cointreau falls by around 2%.
Diageo is a British company dedicated to the manufacture and distribution of alcoholic beverages. It is currently among the top-selling brands globally with several of its products, including Smirnoff vodka, Johnnie Walker whisky, Captain Morgan rum, Baileys liqueur, Crown Royal Canadian whisky, J&B Scotch whisky, and Gordon’s gin.
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