Diageo has issued a profit warning amid a sharp decline in their Latin America and Caribbean business and in early trading shares fell 12%.
The spirits and beer giant who make Johnnie Walker told investors on Friday morning that in the first half of the current financial year, 2023-20224 they expect growth, but it will be slower due to a “weaker” outlook in Latin America and the Caribbean.
Sales in the region accounts for 11% which are expected to see net sales fall by over 20% for the current half year compared to the previous period.
In the six month period Diageo said their organic operating profit growth is expected to decline.
Debra Crew, chief executive of Diageo, said that tensions in the Middle East and the conflict in Gaza has also had an impact.
She said: “It has impacted results for the region since we have stopped trading in some parts.
“It is certainly not the largest part of Europe and Asia Pacific, but we have seen an impact since the tensions and it is weighing on consumer sentiment a little bit more broadly, but this has just been the last few weeks.”
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Diageo has long been a favoured steady-Eddie thanks to its seemingly impenetrable brand power and dividend paying ability, and there will now be concerns that the change in appetites could translate to other, larger markets.”