John Morrissey serves pints of Guinness at a traditional Irish pub in Dublin on May 21, 2024, in Dublin, Ireland.
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Shares of spirits giant Diageo tumbled more than 10% on Tuesday morning, after the Johnnie Walker-maker posted its first sales decline since the start of the pandemic.
The London-based company said organic net sales dropped 0.6% in the full-year to June 30, largely due to weakness in the Latin America and Caribbean region. Reported net sales were down 1.4%.
Guinness, the Irish stout that gained popularity among younger consumers in recent years on the back of celebrity endorsements, posted net-sales growth of 6%. The drink helped drive performance in North America and Europe, the company said.
Diageo is also known for brands such as Baileys, Smirnoff, Captain Morgan, Don Julio and Tanqueray.
“Diageo’s recent results are disappointing but not catastrophic. Revenue has remained fairly stable, with a slight decline of 1% both overall and in the second half,” Chris Beckett, head of equity research at Quilter Cheviot, said in a note.
“The situation in Latin America is concerning as it was the primary reason for the profit warning earlier in the year. The region’s economic conditions have exacerbated inventory issues, leading to a notable loss in margin.”
This breaking news story is being updated.