The company had issued a trading update on 28 September 2023, stating that outlook for fiscal 2024 had not changed since 1 August 2023, however Diageo now predicts slower growth for this period, less than expected, compared to the second half of fiscal 2023.

The outlook in LAC, contributing to nearly 11% of Diageo’s net sales value (fiscal 2023), is now expected to see organic net sales decline by more than 20%, year-on-year, in the first half of fiscal 2024.

Diageo said LAC had experienced “very strong 20% organic net sales growth, versus the first half of fiscal 2023,” however macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading, causing a reduced channel inventory. 

The group added that momentum is continuing in four of its five regions, with North America seeing gradual improvement in organic net sales growth in the first half of fiscal 2024.

Diageo also expects to see improvement in the rate of net sales growth in Africa in the first half of fiscal 2024 compared to the second half of fiscal 2023, while growth in Europe continues to be strong despite geopolitical tensions escalating in the Middle East. 

In Asia Pacific, Diageo continues to see momentum with “good growth”, despite slower than expected recovery in China.

In the second half of fiscal 2024, the group expects to see a gradual improvement in organic net sales and organic operating profit growth from the first half of fiscal 2024.