Diageo Revises Full-Year Sales and Profit Outlook
Diageo has lowered its full-year forecasts for sales and profit due to challenges in the Chinese white spirits market and a slowdown in North American demand. The company anticipates 2026 organic net sales to remain flat or slightly decline, impacted by weaker performance in Chinese white spirits and an unexpectedly soft U.S. consumer environment.
Financial Expectations for 2026
- Organic net sales expected to be flat or slightly lower.
- Organic operating profit growth forecasted at low to mid-single digits.
First Quarter Performance
In the first quarter, Diageo reported flat organic net sales, with a 2.9% increase in organic volume mostly offset by a 2.8% negative price/mix effect. This was largely caused by an unfavorable product mix in Asia Pacific, due to weaker results in the Chinese white spirits segment. Excluding this factor, price/mix was relatively stable.
Comments from Interim Chief Executive Nik Jhangiani
"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."
Diageo aims to accelerate efficiency measures and swiftly adapt its approach in response to current market challenges.
Author’s summary: Diageo adjusts its 2026 outlook downward due to weak Chinese white spirits sales and U.S. demand, while focusing on strategic shifts and efficiency improvements to stimulate future growth.