Diageo Revises Full-Year Sales and Profit Outlook
Diageo, the global drinks manufacturer, lowered its full-year sales and profit forecasts due to weak demand for Chinese white spirits and a slowdown in North America.
Updated Forecast for 2026
- Organic net sales are now expected to be flat or slightly lower.
- This revision reflects negative impacts from Chinese white spirits and a softer US consumer market.
- Organic operating profit growth is projected to be low to mid-single digits.
First Quarter Performance
The company reported flat organic net sales for Q1. While organic volume increased by 2.9%, it was offset by a 2.8% negative price/mix effect. This was mainly due to weaker sales mix in the Asia Pacific region, specifically from Chinese white spirits.
Excluding the Chinese white spirits impact, the price/mix effect would have been nearly neutral.
Interim CEO 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.
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."
Summary
Diageo is actively adjusting strategy and operations to respond to regional challenges and evolving consumer behavior, aiming to sustain growth despite current headwinds.
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