Diageo quarterly sales down 0.7% on slower trading

Diageo, the world's largest spirits maker, reported slower quarterly trading on Thursday, hurt by tough comparisons in Britain and retailers reducing inventory in Southeast Asia.

The maker of Johnnie Walker whisky, Smirnoff vodka and Guinness said net sales in the three months to March 31st, the third quarter of its financial year, fell 0.7 per cent.

The quarterly report is the last of its kind for Diageo, which will do only half-year reporting from next financial year.

Sales fell 0.2 per cent in the six months to the end of December.

Analysts were hoping for signs of improvement in the United States, Diageo's largest market for profit, especially after more positive industry data from Nielsen.

Diageo’s chief financial officer in January said the company was not yet feeling the benefit of an improving economic picture but hoped to soon, as lower fuel prices meant more money to spend on extras such as alcohol.

For its weaker performance, the company blamed a high single-digit sales decline in Britain, due to a tough comparison with last year that saw a buy up ahead of an expected duty increase, regulatory changes in Indonesia and retailers keeping less inventory in Southeast Asia.

Reuters