Diageo Lowers Full-Year Guidance Amid Sluggish Sales
Diageo PLC announced a reduction in its full-year outlook due to underwhelming sales, particularly from weak performances in North America and China. The London-based company, known for brands like Smirnoff vodka, Johnnie Walker whisky, and Guinness, reported a 2.2% decline in sales to USD 4.88 billion during the first quarter of its financial year, compared to USD 4.97 billion the previous year.
Sales Performance Details
On an organic basis, sales remained flat, surpassing the market consensus prediction of a 1.3% drop. The company experienced 2.9% organic volume growth, which was offset by a negative price/mix effect of 2.8%. This was mainly due to an unfavorable product mix in the Asia Pacific region, driven by weaker results in Chinese white spirits.
Excluding this adverse segment, the price/mix impact would have been relatively stable. While organic net sales grew in Europe, Latin America & the Caribbean, and Africa, these gains were negated by the decline in Chinese white spirits and weaker consumer demand in North America.
Impact of Chinese White Spirits and North American Market
Diageo estimated that the Chinese white spirits segment reduced group net sales by approximately 2.5% during the quarter. In North America, difficult year-on-year comparisons affected results, especially due to the previous year's strong Don Julio tequila sales driven by restocking.
“Reflecting the CWS weakness and softer US environment, Diageo lowered financial 2026 expectations for organic net sales growth to ‘flat to slightly down’ from ‘to be at a similar level to fiscal 25.’”
Previous Year Sales Figures
For financial 2025, Diageo reported total sales of USD 20.25 billion.
Summary: Diageo adjusted its 2026 sales forecast downwards due to declines in Chinese white spirits and softer North American demand, despite stable organic volumes and growth in other regions.
Would you prefer a more formal or conversational tone in the summary?