Diageo Lowers Profit and Sales Forecasts Amid Weak Demand
Drinks giant Diageo, owner of Guinness, Smirnoff, and Captain Morgan, has again reduced its sales and profit outlook due to declining demand in China and the US. The FTSE 100 company now expects operating profit growth in the low to mid single-digit range for the year ending June 2026, down from the previously forecast mid single digits.
Sales Performance and Market Impact
Contrary to earlier predictions of flat sales, Diageo now anticipates a sales contraction compared to 2025. Its shares dropped 3.76% (67.50p), closing at 1,730.00p on Thursday, after a nearly 25% decline over the past year. The firm faces pressure to resolve a leadership gap following the death of former CEO Ivan Menezes in 2023.
Executive Statements and Financial Results
“The board of directors is not satisfied with the company's performance,” said Nik Jhangiani, interim chief executive.
Between July and September, Diageo reported net sales of £3.75 billion, down 2.2% from £3.83 billion the previous year. While product prices in Europe rose by 5.3%, sales fell 3.5% in North America and 9.7% in the Asia Pacific region. European sales grew by roughly 5%, partially offsetting declines elsewhere.
Summary
Diageo's updated forecasts reflect ongoing challenges in key markets and leadership transitions, impacting its revenue and growth expectations.
Author's summary: Diageo faces shrinking sales in China and the US, leading to lowered profit forecasts amid leadership challenges and uneven regional growth.