Diageo Shares Drop Following Profit Warning
Diageo reported net sales of $4.9 billion for the three months ending in September, marking a 2.2% decline compared to last year. Shares of the FTSE 100 drinks giant fell after weak demand in China and the US affected sales and profit forecasts.
Profit and Sales Outlook Revised Downward
The group now expects operating profit growth in the low to mid single-digit range for the year ending June 2026, reduced from the previous guidance of mid single digits. Sales are also projected to decline compared to 2025, revising earlier expectations of flat sales.
Causes of Decline
Diageo attributed the weaker outlook to [translate:«негативному влиянию китайских белых спиртных напитков и более слабой потребительской среде в США, чем планировалось»]. The company additionally forecast a $200 million (£153 million) loss due to [translate:«американских тарифов президента Дональда Трампа»].
“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,” interim chief executive Nik Jhangiani said.
Market Reaction and Analyst Commentary
Shares dropped 2.8% to 1747p early Thursday. Adam Vettese, market analyst for 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 declining sales and profit pressure from challenging markets in China and the US, alongside tariff impacts, prompting a cautious outlook and share price decline.
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