Diageo turns positive despite weak US sales – Daily Business

Johnnie Walker to Guinness company Diageo posted a slight rise in net sales to $4.48 billion, up 2.3% year-on-year, despite weaker sales in the US spirits market.

Organic net sales grew just 0.3% as a strong performance in Europe, LAC, and Africa was offset by a high-single-digit decline in North America.

The company reiterated its Fiscal 26 guidance, expecting organic net sales to be down 2-3% and organic operating profit growth to be flat to up low-single-digit.

Savings of approximately $300 million are xpected by the end of this financial year. 

Chief executive Sir Dave Lewis, said: “We are pleased with the strong growth across Europe, LAC and Africa. North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive. Actions are already underway to address this.

“Progress on the re-design of our new strategy and the shaping of a more competitive operating framework is well underway. We are on track to share a Strategy Update with shareholders alongside our fiscal 26 full-year results on 6 August 2026.

“While we are mindful of continued geopolitical uncertainty, including the impact of the ongoing conflict in the Middle East on energy, supply and distribution; we are reiterating our fiscal 26 guidance.”

Alex Pugh, investment writer at Freetrade, said: “Diageo’s Q3 had a little fizz, but was hardly worth popping corks over. Net sales rose 2.3% to $4.5bn, but organic growth was almost flat at 0.3%.

“Strong trading in Europe, Latin America and Africa was watered down by a high-single-digit decline in North America.

“Guinness and Smirnoff ready-to-drink offerings (RTDs) gave the quarter some sparkle, and guidance was held, but Diageo still needs to show it can do more than nurse a North American hangover.

“Former Tesco turnaround boss Dave Lewis is facing a drinks market that looks far from merry: softer US spirits demand, cautious, cash-strapped consumers, younger drinkers moderating, GLP-1s complicating the equation, and the canned cocktail boom.

“This is a business trying to prove it can adapt to a more savvy, more health-conscious drinker without watering down the brands that made it alco supremo in the first place.”