Is It Game Over for the Diageo Share Price After Today’s Results?
The Diageo share price is declining again following a disappointing first quarter, raising doubts about the FTSE 100 stock's ability to recover. On 28 October, the Diageo (LSE: DGE) share price was already concerning, and after the 6 November update, the situation worsened.
Shares have dropped to a 10-year low, a significant fall for a company previously seen as one of the most reliable FTSE 100 blue-chips. Investors have faced repeated setbacks, and today's announcement continued this trend.
Diageo lowered its full-year guidance, citing weakness in Chinese white spirits and a slowdown in North America. Organic net sales for 2026 are now expected to be flat or slightly down, with operating profit growth predicted only in the low-to-mid-single digit range.
Interim CEO Nik Jhangiani sought to reassure the market about flat Q1 net sales, emphasizing cost discipline, efficiency initiatives, and early successes in Europe. However, these remarks seemed vague and somewhat insufficient. Investors demand tangible results, not just talk.
In response, Diageo shares fell by 2.7%.
- The board aims for $625 million in cost savings.
- It targets $3 billion in free cash flow.
- Achieving these goals will require intense focus, especially without a permanent CEO after Debra Crew's departure in July.
- A strong new management team is urgently needed to reverse the company's decline.
Diageo shares have now slumped to a 10-year low, a remarkable fall for a company once regarded as one of the safest FTSE 100 blue-chips.
Investors don’t need talk, they need results.
Author's summary: Diageo faces significant challenges with falling share prices and lowered guidance, demanding strong leadership and decisive action to restore investor confidence and profitability.