Diageo's U.S. Sales Eased 3.7% in Quarter, but Grew 1.2% Worldwide

Diageo reports fiscal first-quarter net sales increased 1.2% to $4.9 billion, with positive organic growth partly offset by unfavourable foreign exchange and the impact of disposals.  Diageo's ADR's rose 4.37% in New York Stock Exchange trading.

Sir Dave Lewis, CEO, said that the first quarter was "in line with expectations and we have reiterated our full-year guidance. We were pleased with the growth across LAC, EMEA, APAC and India. In North America, we continue to focus on making our offer more competitive, and whilst this remains our biggest challenge, clear actions are underway.

"Whilst the market remains challenging, and volatility continues given the geopolitical uncertainty and impact of the ongoing conflict in the Middle East on energy, supply and distribution, results in the first quarter represent a small step in the right direction."

Chief financial Officer Nik Jhangiani said Weakness in Don Julio, Casamigos and Crown Royal was partly offset by growth in Johnnie Walker. Guinness and Smirnoff Ice both posted double-digit growth in the U.S.

Gains in Guinness and Smirnoff reflectred underlying improvement, not simply timing, Lewis said. Guinness had wider distribution and higher sales turnover at existing outlets. and Smirnoff's relaugh activity helped its performance. Smirnoff ready-to-drink sales grew 15%, he said.