Diageo Reports Profit Warning Amid Weak Demand
Diageo announced net sales of $4.9bn for the three months ending September, a 2.2% decline compared to last year. Shares of the FTSE 100 drinks giant dropped following disappointing demand in China and the US, affecting sales and profit forecasts.
Profit and Sales Outlook Downgraded
The group revised its operating profit growth target to low to mid single digits for the year ending June 2026, down from the prior mid single-digit estimate. Diageo now expects sales to shrink compared to 2025, reversing its earlier view of flat sales.
Causes for the Decline
- Adverse effects from [translate:中国白酒] Chinese white spirits
- Weaker-than-expected US consumer environment
- An anticipated $200m (£153m) impact 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 Perspective
Adam Vettese, 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 a tough market with lowered profit and sales expectations due to weakening demand in China and the US, compounded by tariffs and shifting consumer trends.
Would you like the summary to be more formal or casual?