Diageo Reports Decline in Sales and Profit Outlook
Diageo, the FTSE 100 drinks giant known for brands like Guinness and Johnnie Walker, reported net sales of $4.9bn for the quarter ending in September, marking a 2.2% decrease compared to last year. The company's shares dropped following weakened demand in China and the US, impacting sales and profit forecasts.
Revised Profit and Sales Projections
The group indicated that operating profit growth for the year ending June 2026 is now expected to be in the low to mid single-digit range, a downgrade from its previous mid single-digit guidance. Additionally, sales are projected to decline relative to 2025, contrasting earlier expectations of flat sales.
Factors Behind the Downgrade
Diageo attributed the lower outlook to [translate:«негативное влияние китайских белых спиртов и более слабого потребительского рынка в США, чем планировалось»]. The company also forecasted a $200m (£153m) hit from tariffs imposed by President Donald Trump.
“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,” said interim chief executive Nik Jhangiani.
Market Reaction and Expert Opinion
Shares declined by 2.8% to 1747p early Thursday. Adam Vettese, market analyst at eToro, commented:
“Diageo’s latest update reveals a somewhat concerning outlook with some signs of resilience but also significant headwinds, and a cut in forecast being the main talking point. While there was a steady performance in Europe, the slowdown in the US and China poses a real challenge.”
Summary: Diageo faces profit warnings due to weaker demand in China and the US, prompting revised lower forecasts and a decline in share prices.
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