Diageo cuts outlook for full-year sales growth on weakness in key markets

Guinness owner Diageo cut its outlook for full-year sales growth amid weakness in key markets including India and travel retail as countries start restricting flights due to the spread of the coronavirus.

The company forecast sales growth near the lower end of the 4 per cent to 6 per cent targeted range this year. Previously Diageo guided to the midpoint.

Organic net sales rose 4.2 per cent in the six months through December, matching analysts’ estimates. Growth slowed in India as the economy weakened. The UK held up fairly well despite concerns Brexit would weigh on consumption.

Outbreak

The outbreak of the coronavirus in China is set to erode sales in a key market, where Diageo owns the Shui Jing Fang baijiu brand and has opened retail outlets for its Johnnie Walker Scotch whisky. Sales grew 24 per cent in the market last year.