DIAGEO has smashed profit forecasts with a sales bounce back led by strong emerging market growth.
The producer of Smirnoff vodka and Captain Morgan rum said Latin America, Asia and Africa were performing well while traditional markets like the US had been slow to improve.
The world’s biggest spirits maker saw third quarter sales jump by 12 per cent – nearly double the figure forecast by analysts.
However, the figures were flattered by a comparison with a weak first three months of 2009 and the timing of the Easter holiday this year.
Chief executive Paul Walsh said in yesterday’s trading update: “While we have seen some signs of recovery, albeit fragile in the mature markets and stronger in the emerging markets, our performance in the quarter benefited from comparison against a weak third quarter last year, from the earlier Easter this year and in some markets sales were brought forward in advance of excise duty increases.”
Diageo said it was sticking with its forecast of single-digit sales growth for the full year. It has suffered in the economic downturn with its US market particularly badly hit.
Last week, rival Pernod reported a three per cent rise in sales, signalling that the industry as a whole is bouncing back. The group, which also owns the Guinness brand, was created through the merger of Grand Metropolitan and Guinness in 1997. It has more than 20,000 staff and offices in 80 countries.
DRINKS COMPANY IN GOOD SPIRITS
12% underlying sales jump
20,000 the number of Diageo staff
6.5% what analysts forecast
16.2m cases of Johnnie Walker whisky sold every year