Diageo Cuts Full-Year Sales and Profit Forecast
Drinks producer Diageo revised its full-year outlook on Thursday, citing weaker demand for Chinese white spirits and a slowdown in North America. The company now anticipates its 2026 organic net sales to remain flat or slightly lower, reflecting these challenges.
According to Diageo, the forecast includes adverse impacts from both softening Chinese white spirits sales and a sluggish US consumer climate. Organic operating profit growth is predicted to be within the low to mid-single-digit range.
First-Quarter Performance
Diageo reported flat organic net sales for the first quarter. Organic volume grew 2.9%, but this was offset by a negative price/mix effect of 2.8%, mainly caused by weaker results in Chinese white spirits across Asia Pacific. Without this impact, price/mix would have remained largely unchanged.
Executive Statement
Nik Jhangiani, Interim Chief Executive, said: "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."
Diageo emphasized that it is accelerating efforts to refine its business strategy, improve efficiency, and realign investments to adapt to changing market conditions and consumer trends.
Author’s Summary
Diageo lowered its 2026 forecasts due to weak Chinese and US markets but remains focused on strategic growth, operational efficiency, and long-term portfolio development.