Diageo Lowers Profit and Sales Forecasts
Drinks giant Diageo, owner of Guinness, Smirnoff vodka, and Captain Morgan rum, has reduced its sales and profit outlook once again. The company highlighted weakening demand in both China and the United States.
Updated Financial Guidance
- Operating profit growth for the year to June 2026 is now expected to be in the low to mid single-digit range, downgraded from a previous forecast of mid single digits.
- Sales are predicted to decline compared to 2025, overturning earlier expectations of flat sales.
Market Performance and Leadership Challenges
Diageo's shares fell 3.76% (67.50p) to 1,730.00p on Thursday, continuing a decline of nearly 25% over the past year. The company faces pressure amid a leadership vacuum following the death of former CEO Ivan Menezes in 2023.
Comments from Interim CEO
Nik Jhangiani, interim chief executive, said the board of directors was "not satisfied" with the company’s performance.
Recent Sales Figures
- Net sales between July and September dropped 2.2% to £3.75 billion, compared to £3.83 billion the previous year.
- In Europe, average product prices rose by 5.3%.
- North America sales decreased by 3.5%, while Asia Pacific sales fell 9.7% year-on-year.
- European sales grew by approximately 5%, partially offsetting declines in other regions.
Summary
Diageo's latest forecast downgrade reflects ongoing challenges in major markets, leadership instability, and shifting global demand for its products.