Diageo warns of hit to profits from Caribbean slowdown

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Drinks group Diageo has warned that growth in operating profits will slow in the first half on the back of a deepening sales slump in Latin America and the Caribbean, sending its shares down 12 per cent.

The maker of Johnnie Walker, Tanqueray and Guinness said on Friday that it expected sales in Latin America and the Caribbean to fall 20 per cent in the first half, squeezing profits for the group.

As a result, Diageo said it now predicted “organic operating profit growth for the first half of fiscal 24 to decline compared to the first half of fiscal 23”.

The gloomier outlook comes less than two months after London-listed Diageo told investors that operating profit growth would accelerate in the first half of its current financial year.

Addressing the slump in Latin America and the Caribbean, Diageo said that “macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading”. The region accounted for roughly 11 per cent of the value of the group’s sales, it said.

Rivals including Pernod Ricard, Campari and LVMH’s wine and spirits division have all recently reported declining sales.