Diageo plc (LON:DGE) shares topped the FTSE 100 fallers this morning as the drinks firm said it expects its organic first-half sales growth to be hit by a late Chinese New Year and a ban on roadside alcohol sales in India, although it added that its full year expectations remain unchanged.
In early morning trade, Diageo shares were down 1.5%, or 38.5p at 2,457.5p.
In a brief statement ahead of the FTSE 100 firm’s AGM, Ivan Menezes, chief executive of the maker of Johnnie Walker whisky and Smirnoff vodka said: “We expect the H1 organic net sales growth rate will be impacted by the later timing of Chinese New Year and by the expected impact of the highway ban in India.”
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India's top court imposed a ban on liquor outlets within 500 metres of national and state highways in April.
Menezes added: “As previously announced, we are up-weighting our investment behind US Spirits and scotch, and as a result we expect our organic operating margin expansion will be weighted towards H2. Our expectations on overall performance for the year remain unchanged.”
The chief executive concluded: “We re-affirm our expectation of mid-single digit top line growth and 175bps of organic operating margin improvement over the three years ending 30 June 2019."
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