Diageo’s sales hit hard by closing of restaurants, bars
LONDON: Diageo Plc’s sales slumped as the pandemic led to the closure of bars and restaurants, with rising e-commerce and supermarket purchases failing to fill the gap.
Revenue fell 8% in the 12 months through June on an organic basis, the London-based company said yesterday. Analysts expected a decline of 6.4%.The company recorded a £1.3bil (Us$1.7bil) impairment due to Covid19 effects.
The results are somewhat worse than already low expectations, with the company saying in February that it would see organic net sales cut by £225mil to £325mil (Us$294mil to Us$424mil) for the financial year.
The company’s beer business, which includes Guinness stout, joined rivals Anheuser-busch Inbev NV and Heineken NV in reporting a big drop in sales due to lockdowns. A silver lining comes from surging e-commerce, which doubled in the fourth quarter, chief executive officer Ivan Menezes said on Bloomberg TV.
Some of those gains are expected to persist beyond the pandemic as consumer habits change. Like many other consumer-goods companies, Diageo said it’s unable to provide specific financial guidance, given the continued uncertainties around the pandemic and the global economy.
Diageo shares fell as much as 5.3% early yesterday in London. They’ve dropped 14% this year. — Bloomberg