Diageo Reports Fall in Net Sales Amid Weak Demand
Diageo reported net sales of $4.9bn for the three months ending September, marking a 2.2% decline compared to last year. The FTSE 100 drinks giant saw shares fall following weak demand in China and the US, which affected both sales and profit forecasts.
Profit Growth Downgrade and Sales Outlook
The group lowered its operating profit growth forecast to the low to mid single-digit range for the year ending June 2026, down from its prior estimate of mid single digits. Diageo now expects sales to decline compared to 2025, revising its earlier projection of flat sales.
Factors Behind Performance Decline
Diageo, known for brands like Guinness and Johnnie Walker, attributed the drop to
- [translate: the adverse impact from Chinese white spirits and a weaker US consumer environment than planned for]
- an expected $200m (£153m) hit due to 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.
Market Reaction and Expert Commentary
Shares dropped 2.8% to 1747p early Thursday. Adam Vettese, eToro market analyst, 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 challenges from weak demand in China and the US, leading to a lowered profit forecast and declining sales outlook for 2026.
Would you like the summary to be more analytical or neutral in tone?