Menezes said business has improved in all regions since June. He hailed “robust demand” in the off-trade and singled out the US as performing “ahead of our expectations”.
Diageo has now improved its outlook for the first half of fiscal 21, which runs to the end of December. Shares in the Johnnie Walker, Smirnoff and Tanqueray producer increased 9% in the immediate aftermath of the announcement.
Menezes said: “Our outlook for the first half of fiscal 2021 has improved since the year-end, reflecting the good start to the year, particularly for our US business.
“Our US business is performing strongly and ahead of our expectations, reflecting resilient consumer demand and the spirits category continuing to gain share within the total beverage alcohol market. Increased retailer confidence is resulting in some re-stocking in the off-trade channel. The on-trade channel is now open in all states, with some capacity restrictions.
“In Europe, off-trade demand remains robust and the on-trade channel has largely re-opened with the easing of lockdown measures in most countries, although the risk of additional restrictions remains where infection rates are worsening. In China, the on-trade channel continues to recover, although larger banqueting occasions are returning more slowly.
“While the on-trade has also begun to re-open in Africa, India and Latin America and the Caribbean, we expect the pace of recovery in those markets to be more gradual. Travel retail continues to be severely impacted.
“I am pleased with the resilient performance of our business in the current challenging operating environment and encouraged by our progress. While the pace of recovery is uncertain, I am confident in our strategy, the long-term fundamentals of our business and Diageo’s ability to emerge stronger.”
