Firm behind Guinness and Gordons Gin sees profits fall by over 10%

Drinks giant Diageo, the company behind brands including Guinness and Gordon’s Gin, has seen its profits fall 11 per cent after the firm was hit by declining sales in Latin America and the Caribbean.
Michael Crossland
By Michael Crossland
Published 30th Jan 2024, 16:45 BST

Diageo saw its profits fall to $3.3bn (£2.6bn) for the six months ended 31 December, with its sales also dropping by 1.4 per cent to $11.0 billion.

The company said it had been hit by a decline in its organic net sales, driven by a 23 per cent drop in Latin America and the Caribbean. It said the fall in sales was also, in part, caused by an unfavourable $167 million foreign exchange impact.

Hide Ad
Hide Ad

Excluding the Latin American and Caribbean markets, organic net sales grew by 2.5 per cent for the firm.

Drinks giant Diageo, the company behind brands including Guinness and Gordon’s Gin, has seen its profits fall 11 per cent after the firm was hit by declining sales in Latin America and the Caribbean. Photo: Liam McBurney/PA WireDrinks giant Diageo, the company behind brands including Guinness and Gordon’s Gin, has seen its profits fall 11 per cent after the firm was hit by declining sales in Latin America and the Caribbean. Photo: Liam McBurney/PA Wire
Drinks giant Diageo, the company behind brands including Guinness and Gordon’s Gin, has seen its profits fall 11 per cent after the firm was hit by declining sales in Latin America and the Caribbean. Photo: Liam McBurney/PA Wire

Debra Crew, chief executive of Diageo, said: “The first half of fiscal 24 was challenging for Diageo and our sector, particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment.

“Materially weaker performance in Latin America and the Caribbean, driven by fast-changing consumer sentiment and high inventory levels, significantly impacted total business performance.

“Having conducted a review of inventory levels and monitored performance in the critical holiday season, we have taken action and have further plans to reduce inventory to more appropriate levels for the current consumer environment in the region by the end of fiscal 24. This is a key priority.”

Hide Ad
Hide Ad

Diageo saw net sales in Great Britain grow by 9 per cent. It said this was driven primarily by a strong performance in Guinness.

Sales in Eastern Europe dropped 16 per cent, as the company continued the winding down of its operations in Russia. Excluding Russia, however, the firm saw net sales increase by 5 per cent, driven again by growth in Guinness and Don Julio tequila.

Increased sales in Guinness also helped the firm to achieve 10 per cent net sales growth in Ireland.

Sales also declined for the firm in both Southern and Northern Europe.

Ms Crew said that despite “continued global economic volatility”, the group expects to deliver improvements in both organic net sales and operating profit going into 2024.

Related topics:DiageoCaribbeanRussia

Comment Guidelines

National World encourages reader discussion on our stories. User feedback, insights and back-and-forth exchanges add a rich layer of context to reporting. Please review our Community Guidelines before commenting.