Diageo sales lose sparkle in downturn

Guinness-to-Smirnoff drinks firm Diageo today said the economic hangover had caused a sharp slowdown in sales and slashed full-year forecasts on profit growth.

In a sign that the company suffered a difficult festive period, Diageo reported net sales growth was 3% in the six months to the end of December – down from 6% in the first quarter of the period.

Chief executive Paul Walsh, who said he had “confidence in our business”, warned the outlook was “more difficult to predict” for the second half.

He now expects growth in underlying profits of between 4% to 6%, compared with his earlier prediction of 7% to 9%.