Diageo Revises Full-Year Sales and Profit Outlook
Drinks manufacturer Diageo lowered its sales and profit forecasts for the full year due to slow demand for Chinese white spirits and a weaker market in North America. The company now anticipates 2026 organic net sales to be stable or slightly down, affected by challenges in Chinese white spirits and a softer than expected U.S. consumer environment.
Sales and Profit Expectations
- Organic operating profit growth is projected to be in the low to mid-single digits.
- In the first quarter, organic net sales were flat, supported by 2.9% organic volume growth but offset by a negative price/mix impact of 2.8%.
Impact of Market Conditions
The negative price/mix was mainly due to an unfavorable product mix in Asia Pacific, driven by weaker results in China’s Chinese white spirits segment. Excluding this, the price/mix effect would have been approximately neutral.
Interim CEO’s Statement
“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 faces challenges in China and North America, leading to revised cautious sales and profit forecasts and a strategic focus on efficiency and growth adaptation.