The owner of Guinness and spirit maker, Diageo has today (Tuesday, July 30) reported a drop in operating profit in a "volatile operating environment".

Financial results for the year ended June 30, show that the company's organic operating profit dropped by $304 million or 4.8% to just over $6 billion.

Organic net sales dipped by $129 million or 0.6% to €20.2 billion, as an increase in price and mix was more than offset by a 3.5% volume decline.

This decline was primarily driven by a 21.1% decline in Diageo's Latin America and Caribbean region (LAC).

Reported net sales decreased by 1.4% to $20.3 billion due to an unfavourable foreign exchange impact and organic net sales decline, partially offset by hyperinflation adjustments, the company said.

Diageo said that a decrease in organic net sales in North America of 2.5% was due to a "cautious US consumer environment".

In Europe, the company reported a 3% jump in organic net sales, driven by growth in Turkey, Britain and Ireland.

Beer net sales in the region grew 18%, primarily driven by Guinness with double digit growth recorded in Britain and Ireland.

Guinness 0.0 net sales and volume more than doubled in in the year.

However, net sales of spirits in Europe were down 1%, strong growth in raki and Baileys was more than offset by declines in scotch, gin, and rum.

In Ireland, Diageo said that its net sales grew 7%, primarily driven by double-digit growth in Guinness.

Commenting on the results, Debra Crew Diageo chief executive, said:

"While fiscal 24 was a challenging year for both our industry and Diageo with continued macroeconomic and geopolitical volatility, we focused on taking the actions needed to ensure Diageo is well-positioned for growth as the consumer environment improves.

"This offset the decline in North America, which was attributable to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year."

Crew said that Diageo ended the year gaining or holding share in measured markets totalling over 75% of its net sales value, including in the US.

She said that the company has taken actions to manage the inventory issues in LAC.

"We have strengthened our consumer insights and redeployed resources towards the best growth opportunities; we have stepped up our route-to-market across several markets," she said.

Crew added that Diageo is "confident that when the consumer environment improves, the actions we are taking will return us to growth".

"Diageo is a resilient business, benefitting from its global reach and unrivalled brand portfolio.

"With iconic brands that have been enjoyed for decades, Diageo takes a long-term view, and will continue to invest in our brands, people and diversified footprint to deliver sustainable long-term growth and generate shareholder value," she said.

Along with Guinness and Baileys, the company's brands include Smirnoff, Captain Morgan, Johnnie Walker and Tanqueray gin.