Diageo Lowers Sales and Profit Forecasts Again
Drinks giant Diageo has once more reduced its sales and profit expectations due to weakening demand in China and the United States. The FTSE 100 company, which owns brands like Guinness, Smirnoff vodka, and Captain Morgan rum, now anticipates operating profit growth for the year ending June 2026 to be in the low to mid single-digit range, down from the previously predicted mid single digits.
The company also expects sales to decline compared to 2025, in contrast with earlier forecasts of flat sales.
Market Reaction and Leadership Challenges
On Thursday, Diageo's shares dropped 3.76%, or 67.50p, closing at 1,730.00p, after falling nearly 25% over the past year. The group has faced growing pressure to fill its leadership gap following the death of former CEO Ivan Menezes in 2023.
Nik Jhangiani, interim chief executive, said the board was "not satisfied" with the company's performance.
Recent Sales Performance
Between July and September, Diageo reported net sales of £3.75 billion, a 2.2% decrease from £3.83 billion the previous year. While average product prices in Europe increased by 5.3%, sales fell 3.5% in North America and declined sharply by 9.7% in the Asia Pacific region. These losses offset approximately 5% growth in European sales.
Summary
Diageo's lowered profit and sales forecasts reflect ongoing challenges in key markets of China and the US, combined with leadership instability and uneven regional sales performance.
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