Diageo Slides as Distiller Plans $5.6 Billion Investor Return

(Bloomberg) -- Diageo Plc shares slid as the world’s largest distiller said it will return as much as 4.5 billion pounds ($5.6 billion) to shareholders.

• The latest plan, which will run through fiscal 2022, builds on a program that saw the company buy back about 3 billion pounds worth of shares for the year ended June 30, 2019.
• Organic net sales rose 6.1% in the 12 months through June, the London-based company said Thursday, just shy of the analyst estimate of 6.2%.

Key Insights

• Some investors were expecting a bigger reward after the company’s repeated buybacks of recent years.
• Though growth was just short of expectations, the company said product innovation and increased investment in its brands are paying off. In the medium term, it expects to maintain organic net sales growth in the “mid-single digit range”
• Chinese demand for Diageo’s scotch and white spirits has fueled double-digit sales gains in the country.

Market Action

• Diageo fell as much as 3.3% in London. The shares have gained 17% so far this year.

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• Read the statement.

To contact the reporters on this story: Thomas Buckley in London at tbuckley25@bloomberg.net;Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Chris Reiter

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