Guinness maker Diageo suffers major plunge in profits
The world's largest spirits firm, which also makes Johnnie Walker whisky and Gordon's gin, revealed operating profits fell 27.8% to 4.33 billion US dollars (£3.3 billion) in the year to June 30.
It comes weeks after the group said Debra Crew had stepped down as chief executive with 'immediate effect' and by 'mutual agreement', following a decline in Diageo's share value. Guinness maker Diageo has revealed a slump in profits after a 'challenging year' which saw its former boss leave. Pic: Artur Widak/NurPhoto via Getty Images
Interim chief executive Nik Jhangiani said: 'While macroeconomic uncertainty and the resulting pressure on consumers continues to weigh on the spirits sector, we believe in the attractive long-term fundamentals of our industry and in our ability to continue to outperform as the TBA (total beverage alcohol) landscape evolves.
'We are focused on what we can manage and control and executing at pace.
'The board and management are committed to delivering improved financial performance and stronger shareholder returns on a sustained basis.' The world's largest spirits firm, which also makes Johnnie Walker whisky and Gordon's gin, revealed operating profits fell 27.8% to 4.33 billion US dollars (£3.3 billion) in the year to June 30. Pic: Artur Widak/NurPhoto via Getty Images
In May, Diageo unveiled a plan to cut $500 million in costs and make substantial asset sales by 2028 in a major turnaround drive.
Before leaving by 'mutual agreement', Debra Crew had been in the top role for around two years after long-time boss Ivan Menezes' death in June 2023 following a brief illness.
She was one of only a handful of women to lead a blue-chip UK company and previously held the position of chief operating officer. Guinness remained one of their standout performers. Pic: Anton Ivanov/Shutterstock
Crew served in the US military before beginning a career in the consumer goods industry, working at PepsiCo., Nestle and Mars.
She is also a former boss of tobacco company Reynolds American.
Diageo's shares lost about 44% of their value during her tenure.
They have still been among the better performers in the European wine and spirits sector, which has struggled after a boom during the pandemic when people drank more at home.
Recently, Donald Trump's tariff war has made operational challenges at Diageo even tougher.
However, their cash generation remained strong, with free cash flow rising to $2.74bn and net operating cash flow topping $4.3bn, up from $2.33bn and $4.1bn, respectively.
Diageo also increased its cost savings target under its Accelerate programme to $625m and expects to deliver $3bn in free cash flow in fiscal 2026.
Guinness remained one of their standout performer along with Don Julio and Crown Royal Blackberry.
Diageo said that these brands as well as its diversified portfolio and disciplined execution helped offset pressure across parts of its business.
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