Diageo Sales and Profit Update
Diageo reported net sales of $4.9 billion for the three months ending in September, a 2.2% decrease compared to last year. The FTSE 100 drinks giant saw its shares drop after weaker demand from China and the United States negatively impacted sales and profit forecasts.
Operating Profit and Sales Guidance
The group now projects operating profit growth to be in the low to mid single-digit range for the fiscal year ending June 2026, a downgrade from its previous mid single-digit forecast. Diageo also warned sales would likely decline compared to 2025, revising its earlier expectation of flat sales.
Causes of Performance Decline
Diageo attributed the downturn to the «негативному влиянию китайских белых спиртных напитков и более слабой ситуации с потребителями в США, чем ожидалось». The company further anticipated a $200 million (£153 million) hit from «американских тарифов президента Дональда Трампа».
“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 Analyst Comments
Shares fell 2.8% to 1747p early on Thursday. Adam Vettese, a market analyst at eToro, noted:
“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 challenges from weaker Chinese and US demand, US tariffs, and lowered profit expectations, prompting strategic adjustments amid market headwinds.