Diageo shares dropped despite surge in Guinness sales

Diageo (LSE:DGE) shares closed Tuesday’s session more than 5% lower, after its full-year financials fell short of market forecasts.

The Guinness and Smirnoff owner’s group sales for the twelve months to 30 June declined 0.6%, with North American sales down 2.5% and Latin American and Caribbean dropping 21.1%.

Beer sales, meanwhile, were up18% globally thanks mostly to the Guinness brand enjoying a strong year – and, notably, the popularity of the its alcohol-free versions.

Diageo lifted its marketing spend by 4%, with the money pouring into its tequila, beer, and Johnnie Walker brands.

“[It] was a challenging year for both our industry and Diageo with continued macroeconomic and geopolitical volatility, we focused on taking the actions needed to ensure Diageo is well-positioned for growth as the consumer environment improves,” chief executive Debra Crew said in a statement.

Crew added: “With iconic brands that have been enjoyed for decades, Diageo takes a long-term view, and will continue to invest in our brands, people and diversified footprint to deliver sustainable long-term growth and generate shareholder value.”

In London, Diageo shares finished 129.5p or 5.08% lower priced at 2,418p each.