Diageo Revises Full-Year Sales and Profit Forecasts
Diageo, the global drinks producer, lowered its outlook for full-year sales and profits due to weak demand for Chinese white spirits and slower growth in North America. The company now anticipates that its 2026 organic net sales will remain flat or slightly decline.
Factors Influencing the Forecast
- The forecast reflects negative impacts from Chinese white spirits and a softer U.S. consumer market than initially expected.
- Organic operating profit growth is predicted to be in the low to mid-single digits.
First Quarter Performance
In the first quarter, Diageo’s organic net sales were unchanged, with organic volume rising 2.9% but offset by a 2.8% negative price/mix effect. This was primarily caused by adverse mix in the Asia Pacific region, linked to weaker results in Chinese white spirits.
The company noted that excluding the Chinese white spirits performance, price/mix would have been mostly stable.
Comments from Interim CEO Nik Jhangiani
Net sales were flat organically in Q1, with growth in Europe, Latin America and the Caribbean, and Africa offset by weakness in Chinese white spirits and a softer US consumer environment than planned for.
We are not satisfied with our current performance and are focused on what we can manage and control; acting with speed to drive efficiencies, prioritising investment and adapting more quickly to an evolving consumer environment.
We are well advanced in sharpening our strategy, and we are developing and already implementing clear plans to drive growth across the broader portfolio, ensuring that we meet relevant consumer occasions of the future.
Summary
Diageo is adjusting to market challenges by refining its strategy and focusing on efficiency and targeted investment to secure future growth amid diverse regional performances.