Diageo Lowers Profit and Sales Forecasts Again
Drinks giant Diageo has once more reduced its sales and profit expectations, citing falling demand in both China and the United States. The FTSE 100 company, known for brands like Guinness, Smirnoff vodka, and Captain Morgan rum, now anticipates operating profit growth in the low to mid single digits for the year ending June 2026. This is a downward revision from its previous forecast of mid single-digit growth.
Sales Outlook and Market Performance
Diageo expects sales to decline compared to 2025, despite earlier predictions of stable revenues. The company recorded net sales of £3.75 billion between July and September, a 2.2% decrease from £3.83 billion in the same period last year. While average product prices rose 5.3% in Europe, sales in North America dropped by 3.5%, and Asia Pacific sales fell sharply by 9.7%, offsetting roughly 5% growth in Europe.
Leadership Challenges and Market Reaction
The firm faces increasing pressure to resolve a leadership gap following the death of former CEO Ivan Menezes in 2023. Interim CEO Nik Jhangiani expressed dissatisfaction with business results, stating:
“The group’s board of directors is not satisfied with the company’s performance.”
Following the announcement, Diageo shares declined 3.76%, or 67.50p, closing at 1,730.00p. Over the past year, the stock has lost nearly a quarter of its value.
Summary
Diageo’s revised forecasts reflect ongoing challenges in key markets amid leadership transitions, signaling a cautious outlook for the near future.
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