Diageo CEO: ‘we feel good about navigating inflationary environment’

Shares of Diageo plc (LON: DGE) are up 2.0% on Thursday after the British multinational reported solid profit for the first six months of fiscal 2022 on robust growth in higher-end brands.

Highlights from Diageo's H1 financial results

Diageo reported £1.97 billion ($2.65 billion) in net profit versus the year-ago figure of £1.58 billion. On an adjusted basis, it earned £2.74 billion – an increase from £2.26 billion in the comparable period of fiscal 2021.

At £7.96 billion, net sales registered a YoY growth of 16% on strong performance across all regions. According to FactSet, experts had called for £7.73 billion in net sales. The beverage alcohol company declared 29.36 pence of dividend on Thursday versus 27.96 pence last year.

Diageo owns popular brands like Johnnie Walker, Crown Royal, Buchanan's and Windsor whiskies, Ketel One vodkas, Captain Morgan, Tanqueray and Guinness.

Highlights from CEO Menezes’ interview on CNBC’s ‘Squawk Box Europe’

Organic sales were up 13% each in North America and Asia-Pacific and 27% in Europe. Net sales in Greater China came in 18% up. On CNBC’s “Squawk Box Europe”, CEO Ivan Menezes said:

China represents about 5.0% of Diageo’s global business at present that Menezes expects to more than double in the future. From 2023 to 2025, Diageo forecasts up to 7.0% growth in total organic net sales on a 6.0% to 9.0% increase in organic operating profit.

The chief executive is also positive that Diageo is well-positioned to navigate the ongoing inflationary pressures. He added:

Diageo noted a 9.0% increase in volumes as on-trade continued to recover in Europe and North America. The return of travel retail will also serve as a positive catalyst post-COVID.