Spirits giant Diageo is expected to report lower sales and profits next week as consumer spending remains flat.
fireHowever, analysts predict the makers of Johnnie Walker and Baileys could present a solid show when they announce their semi-annual updates to shareholders on Thursday, Jan. 26.
Analysts’ consensus forecast the group to achieve organic net sales growth of 7.9% over the past six months.
As a result, operating income is expected to increase by approximately 7.6%.
However, this represents a slowdown from the previous year’s 18.2% growth after a strong show.
The group, which also owns the powerful Guinness brand, is one of the consumer goods companies under increasing pressure from rising cost of living for shoppers and rising cost inflation.
Sales surged as restaurants, bars and pubs reopened in strong demand a year ago.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown, said:
“Drivers are benefiting from strong demand from drinkers returning to bars and restaurants, especially Diageo’s premium brands.”
Investors are optimistic that a wide range of products and geographies can achieve sustainability.
The group has maintained strong consumer trends so far despite widespread consumer decline and has been particularly successful in recent years by investing in higher quality brands. increase.
Premium beverages continue to be an attractive and affordable luxury for middle and high income groups. But where, what and how consumers shop may start to change.Jefferies Equity Analyst Edward Mundy
Jefferies Equity Analyst Edward Mundy said:
“For middle and high income groups, premium spirits remain a desirable and affordable luxury item. However, where, what and how consumers shop may start to evolve. there is.”
In July, the group issued a cautious outlook statement along with full-year results amid rising costs and continued geopolitical uncertainty.
Investors are hoping for a more positive outlook as global inflation eases slightly and hope price positioning can offset gains.
AJ Bell’s Russ Mold said:
Author: Henry Saker-Clark, Deputy Business Editor, Pennsylvania
Source: Belfast Telegraph