Johnnie Walker whisky maker Diageo DGE.L has beaten annual sales forecasts as more people drank expensive spirits and bars reopened after pandemic lockdowns the previous year.
The world's largest spirits maker, which also makes Tanqueray gin, Captain Morgan's rum and Ketel One vodka, said net sales jumped 21.4% to 15.5 billion pounds ($18.9 billion) in the year to June 30, beating analyst forecasts for a 16.1% rise.
Diageo has benefited since the start of the pandemic from drinkers trading up to more expensive types of alcohol, investing along the way in its premium brands such as Bulleit Bourbon and Don Julio tequila.
"Consumers are choosing to drink better, and that's leading to the premiumization of the category," Diageo's head of finance, Lavanya Chandrashekar, said.
The company said its high-end brands contributed 57% of reported net sales.
Its shares were up 0.9% in early trading on Thursday 28 July.
For the new financial year, though, Diageo sounded a note of caution.
"Looking ahead to fiscal '23, we expect the operating environment to be challenging, with ongoing volatility related to COVID-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty," Chief Executive Ivan Menezes said.
"More Than Offset"
Diageo said it was able to raise prices to "more than offset" its cost inflation of roughly 7-8% since the start of the Russia's invasion of Ukraine. That cost inflation is not expected to abate this financial year, Diageo said.