Diageo is lowering its outlook for its financial year 2026 due to disappointing demand in the United States and China. The producer of Guinness, Johnnie Walker, and Smirnoff still has not been able to find a permanent CEO, increasing worries about its ability to turn things around.
Weak core markets
Diageo is trying to cut costs and sell off parts of the business, while the beverage sector as a whole is struggling with cooling demand, tariff uncertainties and changing drinking habits. Sales in the United States and China are at historic lows due to a lack of consumer confidence. In China, Diageo even reported a decline in sales of more than 10 %.
Diageo expects flat to slightly lower sales for the current fiscal year, with only low growth in operating profit. Previously, the company had targeted annual sales “in line with last year,” when sales increased by 1.7 %, and “mid-single-digit growth” in full-year operating profit.
Uncertainty about a new permanent CEO is also making investors nervous. In July, the company parted ways with Debra Crew, but the promise made by her temporary successor Nik Jhangiani to appoint a new permanent CEO by the end of October at the latest has not been fulfilled, ESM reports.
