Diageo IMS

Diageo is the world's leading premium drinks business, I have a holding in my income portfolio (epic code: DGE)

Diageo released their nine months IMS today, stating that their nine months reported net sales grew 4.6%, but declined 0.3% on an organic basis and were down 0.7% in the quarter.

 

Organic net sales growth was highest in Africa, which saw an increase of 6.2% for the nine months and 8.2% in the third quarter.  Asia Pacific saw the biggest decline with a drop of 5.5% for nine months and 6% in the third quarter; the one bright spot being in mainland China, where net sales grew by 13%, driven by the recovery of Diageo's baijiu business.  

 

Management stated that lower inflation and weak economies will lead to subdued net sales growth in the current year.  CEO Menezes comments that consumers in North America remain the most resilient and while lower gas prices and a more favourable macro outlook have not led to a significant shift, growth in the spirits category is improving.

The shares fell 3.6% to 1896.5p on the release, still 11% above the 12 month low.  I will probably add to my holding if it falls below the 12 month low to provide a yield above 3%.