Analyst Note
| Philip Gorham, CFA, FRM |Diageo's preliminary fiscal 2021 results indicate that the firm beat our forecasts on the top line and delivered margins that were in line with our expectations. Organic net sales growth of 16% was marginally above our forecast, driven by 20% growth in North America. Operating profit grew almost 17% organically, implying underlying margin expansion of around half a percentage point. Management said growth was broad-based across categories, but tequila and baijiu are likely to have been the key drivers, while product innovation in Baileys is likely to have gained traction in the off-trade this year.