Diageo warns of slower sales

LONDON >> Spirits and beer giant Diageo PLC on Friday warned that a sharp slowdown in its business in Latin America and the Caribbean was hitting sales and potential profits.

The company told investors that it expects growth in the first half of the current financial year to be slower than the previous half-year.

It blamed a “materially weaker” outlook in Latin America and the Caribbean as a result of “macroeconomic pressures” and customers downtrading to cheaper products. The region accounts for around 11% of Diageo’s total sales.

That was a surprise for investors as the company, which counts Johnnie Walker whisky, Captain Morgan rum and Guinness among its stable of brands, had previously indicated a “gradual improvement” in sales growth.

The group highlighted that it still expects an improvement in growth in North America, while its businesses in Europe and Asia Pacific witnessed “continued momentum,” though slower than the previous half-year.