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Investing.com -- Diageo (NYSE:DEO) (LON:DGE) reported annual organic sales growth that surpassed market expectations, sending its shares nearly 3% higher in London trading.
For the fiscal year ended June (FY25), net sales came in at $20.25 billion, down 0.1% on a reported basis but up 1.7% organically. That compares with company-compiled consensus estimates of $20.2 billion and a 1.4% organic increase.
Earnings per share (EPS) reached 164.2 cents, ahead of the 161.6 cents expected.
Pretax profit fell to $3.54 billion from $5.46 billion a year earlier, while EBIT declined 0.7%, though still slightly better than the 1.2% drop analysts had forecast.
"We would expect shares to be better today as the business doubles down on the controllables," Jefferies analyst Edward Mundy said in a note.
"As recovery becomes visible, we would expect leverage through the i/s, improving free cash flow (FCF) and better returns, which will allow the shares to rerate to north of 20x PE," he added.
Separately, BofA analysts said Diageo delivered "reassuring results in an uncertain environment."
Looking ahead, Diageo expects organic net sales growth in fiscal 2026 to be in line with this year’s pace, citing a continued challenging environment.
Organic operating profit is projected to grow at a mid-single-digit rate, above the 2.6% consensus cited by Jefferies.