Ireland: Guinness Not So Brilliant.
The iconic St. Patrick's beer has got to be Guinness. It is perhaps Ireland's best known consumer brand and is known throughout the world. Well times have been tough for Guinness as well as for its parent company Diageo PLC {DEO}. Share price is down 53% since November, 2007 and the recession has hit into Pub sales as consumers simply don't have the scratch to go out as much. Note Diageo's sales of alcohol for home consumption have tracked higher in the past six months but such sales carry lower margins than what's sold in restaurants or bars. DEO offers premium beer wine and alcohol products. Johnnie Walker, Captain Walker and Crown Royal are just a few other of their well known names so in the long run they should be fine. Also at current levels the stock carries a 3.4% dividend yield. But right now sales of Guinness like almost everything else that is a discretionary purchase are certainly not looking brilliant.
No positions in DEO and not a recommendation to buy, sell or hold.
posted by CR English at 6:11 AM
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