Diageo cuts full-year sales and profit forecast

Diageo Revises Sales and Profit Outlook

Diageo, the drinks manufacturer, lowered its full-year forecasts for sales and profit on Thursday due to softness in Chinese white spirits and reduced demand in North America. The company now anticipates that its 2026 organic net sales will be flat or slightly decline.

Factors Affecting Forecast

Profit Expectations

Organic operating profit growth is projected to be in the low to mid-single-digit range for the year.

First Quarter Performance

In Q1, Diageo reported flat organic net sales. Organic volume rose by 2.9%, but this was offset by a 2.8% negative price/mix effect, mainly due to unfavorable mix in Asia Pacific caused by weak sales of Chinese white spirits.

Excluding Chinese white spirits, the price/mix effect would have been broadly neutral.

Interim CEO Nik Jhangiani's Statement

"Net sales were flat organically in Q1, with growth in Europe, LAC 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 faces challenges from weak Chinese white spirits and U.S. demand, prompting revised forecasts and strategic adjustments to sustain growth.

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Sharecast Sharecast — 2025-11-06

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