Diageo (DEO) FY19 Earnings Gain, Soft Sales View Hurts Stock
Zacks Investment Research | Jul 26, 2019 08:48AM ET
Diageo (LON:DGE) plc (NYSE:DEO) reported preliminary fiscal 2019 results, ending Jun 30, 2019, wherein pre-exceptional earnings per share improved 10.3% year over year (in local currency). This was mainly driven by strong organic operating profit growth, lower finance charges, positive impact of share buybacks and favorable currency, offset by increased tax expenses and higher non-controlling interests.
However, Diageo’s stock declined nearly 2.4% yesterday probably due to management’s commentary about a slowdown in expected net sales for fiscal 2020.
Though shares of this Zacks Rank #3 (Hold) company have moved down 1.7% in the past three months, it fared better than the industry ’s decline of 4.5%. This alcohol giant is gaining from the focus on innovations, achieving growth through buyouts and penetration in emerging markets.
Fiscal 2019 Highlights
On a reported basis, net sales and operating profit rose 5.8% and 9.5%, respectively, owing to organic growth. Top-line growth was, however, partly negated by acquisitions and divestitures. Its top line and operating profit also included modest favorable impacts of foreign exchange due to the strengthening of the U.S. dollar, offset by the weakening of several currencies like the Turkish Lira, Indian Rupee and the Australian Dollar.
Diageo plc Price and Consensus
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