Diageo reported first-quarter revenue of $4.9bn, reflecting flat organic sales growth (expected: 1.3% decline). Performance was driven by a 2.9% uplift in volumes, which offset an unfavourable shift in sales mix and weakness in China and North America.
The cost-cutting programme remains on track, expected to deliver savings of around $625mn over the next three years. Diageo still expects to deliver around $3bn of free cash flow this year.
Due to the weak start, some of its other full-year guidance has been lowered. Organic sales growth is now expected to be flat to slightly down (previously: flat), and organic operating profit growth is expected to be low to mid-single digits (previously: mid-single digits).
The shares fell 3.1% in early trading.
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Diageo key facts
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