John Morrissey serves glasses of Guinness at a traditional Irish pub in Dublin on May 21, 2024, in Dublin, Ireland.
Noor Photo | Noor Photo | Getty Images
Shares of the spirits giant Diego Apple Inc. shares fell more than 10% Tuesday morning after the maker of Johnnie Walker products reported its first drop in sales since the start of the pandemic.
Shares were down 8.45% at 10:12 a.m. UK time.
The London-based company said organic net sales fell 0.6% in the full year to June 30, largely due to weakness in Latin America and the Caribbean. Reported net sales fell 1.4%.
The company said Guinness, the Irish beer that has gained popularity among younger consumers in recent years in part due to celebrity endorsements, was the main driver of overall net beer sales growth of 18%. Meanwhile, spirits sales fell 1%.
Guinness saw double-digit volume growth largely due to share gains in Ireland and the UK.
Reflecting a wider trend in the industry, sales of non-alcoholic beer have been booming, with Guinness 0.0 net sales and volume more than doubling in the financial year.
Diego is also known for its brands such as Baileys, Smirnoff, Captain Morgan, Don Julio and Tanqueray.
CEO Deborah Crowe said last year was a “challenging year” for the company and the industry more broadly due to macroeconomic and geopolitical volatility.
North America has suffered from a cautious consumer environment as well as inventory restocking issues, Crowe said.
“Digio’s latest results are disappointing but not catastrophic,” Chris Beckett, head of equity research at Quilter Cheviot, said in a note. “Revenues remained fairly flat, with a slight 1% decline overall and in the second half.”
“The situation in Latin America is worrying, as it was the main reason behind the profit warning earlier this year. Economic conditions in the region have exacerbated inventory problems, resulting in a significant loss in margin.”
