By Christiana Sciaudone
Investing.com -- Reopened bars have helped bring on new waves of coronavirus infections, but they've also been a boon for Diageo (LON:DGE).
The maker of Johnnie Walker rose 7% after saying it is seeing improvements across all regions.
Robust demand in the off-trade channel and the gradual reopening of the on-trade channel in most markets have shown robust demand, Chief Executive Officer Ivan Menezes said in a statement.
"Our U.S. 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," Menezes said. "Increased retailer confidence is resulting in some re-stocking in the off-trade channel."
European off-trade demand is robust and the on-trade channel has largely re-opened with the easing of lockdown measures, although the risk of additional restrictions remains. 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.
Shares are down 18% this year.
Last month, the brand closed a deal to buy Davos Brands LLC and Aviation American Gin LLC for $610 million. Aviation is partly owned by actor Ryan Reynolds.
In early August, Diageo said organic sales fell 8.4% in FY20, a bigger drop than the consensus estimate of a decline of 6.3%. It marked the worst quarter in more than 10 years. Organic sales slumped the most in Asia with a 16% decline.