Spirits giant Diageo on Wednesday toasted a slight recovery in fortunes thanks to businesses stocking up ahead of the football World Cup in the US, Canada and Mexico.
The British maker of Don Julio tequila, Guinness stout and Smirnoff vodka said group sales grew 2.3 percent to $4.5 billion (£3.3bn) in Diageo's third quarter, or three months to the end of March.
Analysts' consensus had been for a drop, according to a company-compiled poll.
“Shipments benefitted from distributor buy-in ahead of the FIFA World Cup” beginning in June, the group said in an earnings statement, with additional help from Easter arriving earlier than one-year ago.
Diageo, whose brands include Johnnie Walker whisky and Baileys liqueur, reported a 0.3 per cent growth in quarterly organic net sales as growth in Europe and Latin America offset weakness in the US, its largest market.
Analysts had expected a 2.3 per cent decline in organic net sales for the quarter.
The company maintained the outlook for its current 2025/26 trading year.
“While we are mindful of continued geopolitical uncertainty, including the impact of the ongoing conflict in the Middle East on energy, supply and distribution, we are reiterating our fiscal 26 guidance,” said group chief executive Dave Lewis, who took the helm in January.
Lewis, a former CEO of British supermarket giant Tesco, replaced Debra Crew, who struggled against weak sales in the United States and China amid President Donald Trump's tariffs onslaught.
“North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive,” Lewis said Wednesday.
Diageo's share price rallied 4.8 percent following the update on London's benchmark FTSE 100 index, which jumped 2.2 percent overall in late morning deals on hopes for an end to the Iran war.
“While there are green shoots of a recovery in its latest trading update, it's lopsided,” noted Dan Coatsworth, head of markets at AJ Bell.
“Europe, Latin America and Caribbean enjoyed decent quarterly growth whereas North America was disappointing. That's troubling because the period included distributors stocking up in North America ahead of the football World Cup.
“Without that boost, the region's showing could have been truly miserable,” Coatsworth added.