Q1 trading update reveals better US trends Diageo has released a short Q1 trading update in conjunction with its AGM. Performance has improved since the FY21 guidance was first issued at the end of July. Organic sales and operating profit growth have improved since the H2 level (of -23% and -42%, respectively), helped by better trends in the important US market (c. 45% of group EBIT) including some off-trade re-stocking. Other markets are less robust, but moving in the right direction slowly. However, the guidance for H1 continues to expect lower organic sales and operating profit compared to the previous year. We think the backdrop for Spirits is still extremely fragile and make no changes to our estimates at this time. We currently model H1 organic sales -15% and organic EBIT -22%.