Johnnie Walker whiskey maker Diageo said on Friday it expected organic operating profit growth to decline in the first half of its current financial year due to "materially weaker" performance in Latin America and the Caribbean.
Shares in the world's largest spirits company fell 8.5% to 2,970 pence in early trading, making it the top loser on London's blue-chip .FTSE index.
'Lower Consumption'
'Macroeconomic pressures in the region are resulting in lower consumption and consumer downtrading,' the world's biggest spirits company said in a statement.
'These impacts are slowing down progress in reducing channel inventory to appropriate levels for the current environment.'
Geopolitical Tensions
Sales in the Latin America and Caribbean (LAC) market, which generates nearly 11% of total sales, are now expected to decline by more than 20% in the six months ended December, the company added.
Meanwhile in Europe, growth continues to be strong despite geopolitical tensions in the Middle East, albeit the pace is slower than the second half of the previous financial year, Diageo said.
For the year ended June 30, the maker of Tanqueray gin and Don Julio tequila narrowly beat earnings estimates as sales of its more expensive liquor brands offset lower volumes.
UK's FTSE 100
The UK's FTSE 100 slipped on Friday, as data showed that Britain's economy failed to grow in the third quarter and the beverages index took a tumble following Diageo's profit decline warning.
The exporter-focused FTSE 100 .FTSE was down 0.9% at 0932 GMT, while the mid-cap FTSE 250 .FTMC dropped 2.2%, on track for the biggest one-day fall since early July. Both indexes were on track for a weekly decline.
Shares of Diageo moved 13.6% lower after the Johnnie Walker whisky maker said it expected organic operating profit growth to decline in the first half of fiscal 2024, due to weakening sales in Latin America and the Caribbean, as well as higher trade investments.
