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Diageo trading ahead of expectations thanks to strong US demand

Off-sales are robust while most on-trade outlets have now reopened.

Diageo PLC -
Diageo is focusing on at-home occasions

Diageo PLC (LON;DGE) said its outlook for the first half of this financial year had improved after a good start and especially in the US.

Ivan Menezes, chief executive of the Johnnie Walker, Smirnoff and Gordon’s Gin group, said off-sales had remained robust while most on-trade outlets had now reopened.

“Our US business is performing strongly and ahead of our expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market,” he said in a statement ahead of the FTSE 100 group's AGM.

US on-venues are now open in all states, with some capacity restrictions, the company noted.

In Europe, off-trade demand also remains robust and the on-trade channel has largely re-opened though there is a risk of new restrictions where infection rates are worsening.

On-sales are also recovering in China, more slowly in Africa while travel retail is still being severely impacted, Menezes said.

“We continue to expect sequential improvement in organic net sales and operating profit compared to the second half of fiscal 20."

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Price: 3458 GBX

Market Cap: £80.67 billion

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