- Sales in three months to end of December decline 5.1% to US$5.56bn
- ‘Asia Pacific’ and ‘North America’ down by 14% and 10.4%, respectively, in Q2
- Flat first quarter means sales in first six months of fiscal 2026 down 2.8% at US$10.46bn
Diageo’s forecast of a “flat to slightly down” sales performance for its current financial year has taken a hit in the group’s latest quarter, when the top line fell by mid-single digits.
The Guinness brand owner said today (25 February) that its sales in the three months to the end of December – the second quarter of fiscal 2026 – fell by just over 5%. The slide, which virtually mirrored that of rival Pernod Ricard for the same period, combined with Diageo’s flat first quarter to result in a 2.8% top-line dip from its fiscal first half – an improvement on Pernod’s -5.9% in H1 of fiscal 2026.
Subsequently, the full-year estimate, which was made in November’s Q1 results announcement, of “flat to slightly down” sales has been clarified today to a decline of between 2% and 3%.
On a regional basis, the ‘Africa’ reporting region was the brightest spot over the half-year, with sales increasing by 10.9% on the corresponding period a year earlier. ‘Europe’, meanwhile, was up 2.7% while the ‘Latin America & Caribbean’ region has recovered from its miserable H1 of fiscal 2024 as sales rose 4.5%.
On the other hand, the ‘Asia Pacific’ and ‘North America’ reporting regions had a troublesome time in H1; the former booked a sales slide of 11.1% while ‘North America’ was down 6.8%. According to Diageo, the pair were affected by “pressure on disposable income impacting US spirits” alongside the “adverse impact of Chinese white spirits” in Asia Pacific.
Turning to the company’s portfolio, and the consumer preference to trade down in the US was manifested by Diageo’s tequilas; while Don Julio posted a sales slide in the first half of 14%, Casamigos fared even worse, slumping by 27% on the corresponding period in 2024. In scotch whisky, Johnnie Walker was up by 2% on a 1% volumes lift, thanks to “successful advertising, innovation, increased point-of-sale activation and targeted competitive price adjustments”.
The blended scotch’s positive showing was overshadowed by Guinness, though, which grew its sales by 11%, just behind blended scotch Buchanan’s +13% value jump. The remaining brands in the grouping were all down by low-single digits, with the exception of Canadian whisky Crown Royal at -8% .
In his first set of company results since becoming CEO at the start of January, Dave Lewis sounded an optimistic tone for the mid- to long-term. “Only several weeks in,” he said, “I can already see significant opportunities for Diageo to act more decisively to enhance its competitiveness and broaden the portfolio offering, leading to higher growth.
“I am encouraged by the depth of the passion and pride that our people have for our brands across the business. This will be invaluable given the significant work ahead.”
Headlines elsewhere in today’s coverage of Diageo’s half-year centred around the decision to reduce the dividend paid to shareholders. The move has been made in order to “accelerate the strengthening of the balance sheet and create more financial flexibility”, the company said.
Also in the results announcement, Diageo confirmed recent reports that its Indian division, United Spirits, is “undertaking a strategic review of its ownership of [Indian Premier League cricket team] Royal Challengers Bengaluru”. A sale would garner in the region of US$1.5bn to $2bn, according to IPL observers.
