India's United Spirits misses quarterly profit estimates on higher spends
The Indian arm of spirits maker Diageo (DGE.L), opens new tab reported a profit of 2.58 billion rupees ($29.50 million) for the quarter ended June 30, a fall of 14% from a year ago.
Analysts, on average, had predicted 3.03 billion rupees, according to data compiled by LSEG.
However, net sales value in United Spirits' premium segment, which includes Johnnie Walker whiskey and Tanqueray gin, rose 9% year-on-year, driving an 8.4% rise in overall sales value.
For more earnings highlights, (click here).
Affluent Indians, unperturbed by higher living costs, are splurging on everything from high-priced liquor to watches and jewellery.
'Premiumization' has lifted the profits of companies ranging from spirits sellers such as Radico Khaitan (RADC.NS), opens new tab to department store chain Shoppers Stop (SHOP.NS), opens new tab.
Still, United Spirits' marketing spends grew 36%, while overall costs rose about 9%.
Its quarterly earnings before interest, taxes, depreciation, and amortisation (EBIDA) fell to 4.15 billion rupees from 4.58 billion rupees a year ago. Gross profit margin fell to 44% from 44.5% a year ago.
PEER COMPARISON
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
APRIL TO JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 87.4660 Indian rupees
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