Sales of Guinness and its variants, such as Guinness 0.0 and Nitrosurge, soared in the UK, leading to a 5% increase in the company’s sales in the region. Overall, Diageo’s beer brands saw an 18% growth globally, largely driven by Guinness.

Despite the strong performance of beer, spirits sales declined by 1% in Europe, due to the falling popularity of scotch, gin, and rum. However, raki and Baileys experienced robust growth, somewhat offsetting the decline.

The company had increased its marketing spend by 4%, focusing on tequila, beer, and Johnnie Walker.

In Europe, sales grew by 3%, driven by double-digit growth in Turkey and mid-single-digit growth in the UK and Ireland. However, total net sales fell by 1.4% to $20.3bn, and operating profit declined by 4.8% to $304m, largely due to a weak performance in Latin America and the Caribbean.

Debra Crew, 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.”

In North America, sales declined by 2% as consumers cut back on tequila, leading to a 22% fall in sales of Casamigos. However, Don Julio sales grew by 22%, and vodka sales declined by 8%.

Ms Crew added: “We have 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, including our most significant transformation in at least a decade in our US Spirits organisation; we have delivered record productivity savings of nearly $700 million; and we have generated $2.6 billion in free cash flow while increasing strategic investments.

“We are confident that when the consumer environment improves, the actions we are taking will return us to growth.”

Russ Mould, investment director at AJ Bell, commented: “Diageo has gone from bad to worse. It has reported an operating profit decline in four out of its five operating regions, two of them in substantial double-digit territory. The company can dress up the numbers all it wants, but it’s clear that something major has to change.

“Debra Crew will be fighting to keep her job as chief executive. If the board doesn’t do something, one can expect activist investors to circle Diageo and push for new leadership.

“This is a business with an enviable portfolio of brands and a distribution network that ensures its products have prominence in pubs, bars, hotels, restaurants and shops. The big question is how can a business of this calibre lose its way? Unfavourable foreign exchange movements are an unfortunate obstacle for any company, but there is more to Diageo’s problems than currency rates.

“Management seems to have taken its eyes off the ball with monitoring inventory levels and working out ways to keep consumers spending when they are being pickier with where they splash the cash.

“Diageo’s shares have tanked once again on the latest results. Investors won’t like the figures, nor will they like the absence of a new share buyback programme and the fact the balance sheet is close to getting out of the company’s comfort zone. Diageo targets 2.5 to 3 times net debt to adjusted earnings and the leverage ratio is now sitting at the top end”

“Following the latest sell-off, Diageo’s share price is now trading at a seven-year low. That’s the market’s way of saying it is thoroughly unimpressed with the business.”