Diageo revealed that sales grew unexpectedly in the latest quarter as growth in Europe helped to offset weaker trading in the US.
The FTSE 100 firm said buoyant demand for Guinness in the UK and Ireland helped drive a rise in sales in Europe.
Shares in the company lifted higher on Wednesday morning as a result.
The update comes as the world’s largest spirit business continues to undergo a major turnaround under former Tesco boss Sir Dave Lewis.
He said on Wednesday that trade in North America was the group’s “biggest challenge” amid “soft” market conditions but stressed that it was already taking actions to address this.
Diageo, which also owns Johnnie Walker and Gordon’s gin, said that organic sales had increased by 0.3% in the three months to March, with volumes up 0.4%. Analysts had predicted a decline for the quarter.
It said this came despite a drag in North America, where it saw “high single-digit” decline due to weakness in US spirits sales.
This was offset by “strong” growth in Europe, Latin America and Caribbean (LAC), and Africa, amid a benefit from the timing of Easter and advance sales ahead of the 2026 World Cup.
In Europe, organic net sales grew by 8.8% for the quarter to 1.05 billion US dollars (£770 million), led by strong sales of Guinness.
Sir Dave said: “We are pleased with the strong growth across Europe, LAC and Africa.
“While we are mindful of continued geopolitical uncertainty, including the impact of the ongoing conflict in the Middle East on energy, supply and distribution; we are reiterating our fiscal 2026 guidance.”
Adam Vettese, market analyst for EToro, said: “Diageo’s Q3 trading update this morning shows tentative signs of stabilisation after a bumpy period, but the group is not out of the woods yet.”
