During the sixth month period reported net sales were valued at $10.9bn, down from £11.1bn a year earlier. This represented a decline of $158m.
Elsewhere, operating profits declined by just over 11% year-on-year to $3.3bn, while volumes fell by 5%.
Diageo put the net sales decline down to a $167m unfavourable foreign exchange impact and a poor trading period in Latin America and Caribbean (LAC), where net fell by $310m or 23%.
Meanwhile, the operating profit reduction was attributed to a “lower organic operating margin and a negative impact from exceptional operating items”.
Diageo owns well-known brands including Baileys, Guinness and Johnnie Walker.
‘Challenging period for Diageo and drinks sector’
Commenting on first half of Diageo’s 2024 fiscal year, chief executive Debra Crew said it had proved a “challenging” period for the group and the wider sector, “particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment”.
Crew continued: “Excluding LAC, our group organic net sales grew 2.5%, driven by good growth in Europe, Asia Pacific and Africa. While North America delivered sequential improvement in line with our expectations, we are focused on returning to high-quality share growth as consumer behaviour continues to normalise in our largest region.”
Explaining the poor performance in LAC, Crew said it had been “driven by fast-changing consumer sentiment and high inventory levels”, and noted that rectifying this was a “key priority” for the firm moving forward.
“Having conducted a review of inventory levels and monitored performance in the critical holiday season, we have taken action and have further plans to reduce inventory to more appropriate levels for the current consumer environment in the region by the end of fiscal 24,” she added.
‘Diageo expects to deliver improvements’
Projecting ahead for the rest of the 2024 fiscal year, Crew said that Diageo expects to deliver improvements in organic net sales and organic operating profits, despite “continued global economic volatility”.
She concluded: “While the macro environment will continue to present challenges, I am confident that we remain well-positioned and resilient for the long term. We are diversified by category, price point and region and will continue to invest behind our iconic brands to maintain our position as an industry leader in total beverage alcohol, an attractive sector with a long runway for growth.”
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