Diageo Shares Fall Amid Profit Warning
Diageo reported net sales of $4.9 billion for the three months ending September, a 2.2% decline compared to last year. Shares in the FTSE 100 drinks giant dropped after weak demand in China and the US impacted sales and profit forecasts.
Profit and Sales Outlook Downgraded
The company now expects operating profit growth to be in the low to mid-single-digit range for the year ending June 2026, down from its previous forecast of mid-single digits. Sales are also expected to decline compared to 2025, reversing earlier expectations of flat sales.
Reasons for the Decline
Diageo, which makes Guinness and Johnnie Walker, put the move down to “the adverse impact from Chinese white spirits and a weaker US consumer environment than planned for”. The firm also warned it anticipates a $200 million (£153 million) hit from President Donald Trump’s US tariffs.
“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.
Shares dropped 2.8% to 1747p early Thursday. Market analyst Adam Vettese from eToro remarked:
“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’s recent earnings highlight challenges from weaker demand in key markets and US tariffs, prompting a cautious revision of profit and sales forecasts.