It’s not easy being a Diageo shareholder these days. A halved dividend, falling US sales, shrinking operating profits – investors really didn’t like the company’s latest results, with even a record one-day share price fall of nearly 13 per cent failing to tempt bargain hunters the next day.
The one bright spot for the company was Guinness, with organic sales rising 10.9 per cent. Indeed, growth topped 15 per cent in North America, making it the fastest-growing beer brand in the market.
New chief executive Dave Lewis, known as Drastic Dave for his cost-cutting at Tesco, sounded genuinely impressed.
“I thought it was a phenomenally strong brand before I joined Diageo. Now I can see it from the inside, it’s even stronger than I thought,” he told investors.
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As well he might, given Guinness now boasts five years of double-digit growth and continues to gain market share in key regions.
“Sell everything else except Guinness and change the name to Guinness plc,” joked one FT commenter.
An exaggeration? Just a bit – Diageo itself highlights both Guinness and Johnnie Walker as the “standout performers”.
Still, the sentiment is easy to understand, with Guinness being a rare source of positivity for Diageo in yet another decidedly sobering set of results.
