Diageo shares slide on profit warning after weak Chinese demand

Diageo Reports Decline in Sales and Profit Outlook

Diageo announced net sales of $4.9 billion for the quarter ending in September, marking a 2.2% decrease compared to last year. Shares of the FTSE 100 beverage giant dropped following weak demand in China and the US, which affected sales and profit forecasts.

Profit and Sales Guidance Revised Downward

The company expects operating profit growth to be in the low to mid single-digit range for the fiscal year ending June 2026, down from the previous mid single-digit projection. Sales are now anticipated to decline compared to 2025, contrary to earlier expectations of stable sales.

Factors Affecting Performance

"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 Expert Opinion

Shares declined 2.8% to 1747p early Thursday. Adam Vettese, a market analyst at eToro, commented:

"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 lower sales and profit due to slumping demand in China and the US, compounded by tariffs, prompting a cautious outlook and strategic adjustments by leadership.

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City AM City AM — 2025-11-06

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