Diageo cuts full-year sales and profit forecast

Diageo Cuts Full-Year Sales and Profit Forecast

Drinks producer Diageo reduced its full-year sales and profit outlook on Thursday, citing weaker performance in Chinese white spirits and slowing demand in North America. The company now anticipates that its 2026 organic net sales will remain flat or slightly decline.

Diageo noted that these revised expectations reflect the continued weakness in Chinese white spirits and a softer-than-expected US consumer market. Organic operating profit growth is now projected to reach only low to mid-single digits.

Quarterly Performance

In the first quarter, Diageo reported flat organic net sales. Organic volume growth of 2.9% was counterbalanced by a negative price and mix effect of 2.8%, primarily resulting from weaker results in Asia Pacific due to challenges in China’s white spirits segment. The company stated that, without this impact, price and mix would have been mostly stable.

Executive Commentary

“Net sales were flat organically in Q1, with growth in Europe, LAC and Africa offset by weakness in Chinese white spirits and a softer US consumer environment than planned for,” said interim chief executive Nik Jhangiani.

“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.”

“We are well advanced in sharpening our strategy, and we are developing and already implementing clear plans to drive growth across the broader portfolio, ensuring that we meet relevant consumer occasions of the future.”

Outlook

Diageo emphasized its commitment to driving efficiency, rebalancing investments, and refining strategy to capture future growth opportunities across its global portfolio.

Author’s summary: Diageo, facing slowing demand in China and the US, lowered its 2026 outlook but aims to recover through operational efficiency and strategic adjustments.

Sharecast — 2025-11-06