Why Alcoholic Beverage Company Diageo Stock Is Tumbling Today

Diageo PLC DEO shares are diving today by around 13% after it warned about weak H1 FY24 results.

DEO expects slower growth in H1 FY24 than H2 FY23 owing to a materially weaker performance outlook in Latin America and Caribbean (LAC).

For H1, total organic net sales are projected to fall by over 20% Y/Y, and total organic operating profit to decline Y/Y owing to lower LAC’s net sales, higher trade investment, decline in operating leverage, and negative mix.

However, DEO expects an improvement in H1 organic net sales growth vs. H2 FY23 in North America and Africa and continued momentum (albeit slower than in H2 FY23) in Europe and Asia Pacific.

For H2 FY24, DEO projects a gradual improvement in organic net sales and operating profit growth vs. H1 FY24.

Also, the company continues to expect to deliver organic net sales growth of 5%-7% and operating profit to grow broadly in line with organic net sales growth over the medium term thanks to an attractive segment of International Spirits, its advantaged portfolio and footprint, and higher investments.

Also Read: Shaking Things Up: Diageo Unit Guinness Nigeria Puts A Pause On Johnnie Walker Imports Amid Currency Woes

Last month, Diageo inked and closed the sale of Windsor Global, its subsidiary to PT W Co., Ltd in South Korea.

Price Action: DEO shares are down 13.37% at $138.57 premarket on the last check Friday.