Diageo has reported an unexpected rise in quarterly sales, driven by strong demand for Guinness in the UK and Ireland, which helped offset a decline in the US market. The FTSE 100 spirits giant posted a 0.3% increase in organic sales for the three months to March, with volumes up 0.4%, defying analyst expectations of a decline.
The company, which also owns Johnnie Walker and Gordon's gin, saw a high single-digit drop in North America due to weak US spirits sales. However, this was countered by robust growth in Europe, Latin America and the Caribbean (LAC), and Africa, partly boosted by the timing of Easter and advance sales ahead of the 2026 World Cup.
In Europe, organic net sales rose 8.8% to $1.05 billion (£770 million), led by Guinness. Chief executive Sir Dave Lewis, the former Tesco boss leading a turnaround, described North America as the group's 'biggest challenge' amid soft market conditions, but said actions were being taken to address it.
Sir Dave said: 'We are pleased with the strong growth across Europe, LAC and Africa. While we are mindful of continued geopolitical uncertainty, including the impact of the ongoing conflict in the Middle East on energy, supply and distribution; we are reiterating our fiscal 2026 guidance.'
Adam Vettese, market analyst at eToro, commented: 'Diageo's Q3 trading update this morning shows tentative signs of stabilisation after a bumpy period, but the group is not out of the woods yet.' Shares rose on Wednesday morning following the update.
