Diageo (DEO) FY16 Earnings Increase As Expenses Decline
Zacks Investment Research | Jul 31, 2016 10:58PM ET
Diageo (LON:DGE) plc’s (NYSE:DEO) earnings in fiscal 2016 (ended Jun 30, 2016) gained 1.0% (in local currency) year over year to 89.4 pence ($1.32* per share) from 88.8 pence ($1.37* per share) in the year-ago period backed by organic profit growth, higher associates income and lower finance charges.
Unfavorable retail conditions in the emerging markets hindered profit during the fiscal year.
On a reported basis, net revenue (total revenue excluding excise duties) slipped 3% in local currency in fiscal 2015. Unfavorable exchange and disposals more than offset organic growth in each region and accretion from acquisitions. Volume growth in reserve brands was offset by a decline in beer and scotch in the emerging markets. As a result, overall volume remained flat year over year.
On an organic basis, net sales inched up 3% to £276 million ($4.1 billion) backed by sales gain in all the geographic regions. Volumes rose 1% on an organic basis.
In fiscal 2015, Diageo witnessed 2% decline in marketing spending, on an organic basis. Operating profit before exceptional items (excluding acquisitions and disposals) went up 3% year over year, on an organic basis.
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