StockMarketWire.com - Alcoholic drinks maker Diageo said its outlook for first half of its 2021 financial year had improved since the previous year's end, citing particular strength at its US business.

'Compared to the first half of fiscal 2020, we still expect lower organic net sales and margin dilution,' the company said.

However, organic net sales and operating profit in the first half were expected to improve compared to the second half of fiscal 2020.

Its US business was performing strongly and ahead of the company's expectations as increased retailer confidence was resulting in some re-stocking in the off-trade channel. The on-trade channel was now open in all states, with some capacity restrictions.

In Europe, off-trade demand remained robust and the on-trade channel had largely re-opened, though the risk of additional restrictions remained where infection rates were worsening, Diageo said.

In China, the on-trade channel continued to recover, though larger banqueting occasions are returning more slowly.

While the on-trade had also begun to re-open in Africa, India and Latin America and the Caribbean, the pace of recovery in those markets was expected to be more gradual, it added. Travel retail continues to be severely impacted.

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