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Diageo improves outlook as US demand rises

The drinks giant is staring to see a gradual recovery in many of its chief markets
Diageo improves outlook as US demand rises

Diageo (DGE) has briefed on its trading prospects for the year to June 2021, which are looking better partly on the basis of an improved showing in the US. The liquor giant now expects sequential improvement in organic net sales and operating profit compared to the second half of the June year-end, although results will still suffer by comparison to the first half of FY2020.

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Spirit sales in the US have continued to increase as a proportion of the overall alcohol drinks market, while the easing of many state restrictions is boosting sales in the group’s on-line channels, and retailers have started to re-stock as general business confidence improves.

News is mixed across the group’s other locales, with China’s on-trade continuing to recover even though large banqueting occasions are thin on the ground compared to normal. Across Europe, off-trade demand remains strong, while bars and restaurants are returning to a degree of normality. The group cautions that rising infection rates across the continent still pose a threat to on-trade volumes.