Diageo, the leading alcoholic beverage company, announced its earnings for fiscal 2023 on Tuesday. Despite some mixed results, the company demonstrated solid growth and maintained a positive outlook for the future.
Pretax Profit
Diageo achieved a pretax profit of £4.74 billion ($6.08 billion) for the year ended June 30, surpassing the previous year’s result of £4.39 billion. However, this fell slightly below the consensus of £5.06 billion from FactSet.
Net Sales
The company reported net sales of £17.11 billion, showing an increase from the previous year’s figure of £15.45 billion. Although the growth was notable, it fell short of FactSet’s market consensus of £17.22 billion.
Sales Growth
Diageo experienced organic net sales growth of 6.5%, exceeding the consensus forecast of 6.4% as provided by the company’s website.
Key Highlights
During the fiscal year, several key developments stood out:
U.S. Sales Stable
Diageo delivered a stable performance in North America, with organic revenue remaining flat as the industry continued to recover from the effects of the pandemic. However, other regions, particularly Europe and Asia Pacific, achieved organic growth.
Dividend Raise
The company declared a final dividend of 49.17 pence per share, representing a 5% increase from the previous year.
Guidance
Diageo reaffirmed its medium-term guidance, anticipating annual organic net sales growth of 5% to 7% and organic operating profit growth of 6% to 9%. However, the company’s outlook for fiscal 2024 remains uncertain, with RBC analysts James Edwardes Jones and Emma Letheren noting that little information is available aside from a second-half focus.