Diageo sees flat 2026 sales, warns of $200 million tariff impact
The maker of Johnnie Walker whisky and Smirnoff vodka had previously forecast a $150 million per year hit to operating profit from the tariffs.
Diageo is looking for a new CEO, opens new taband finance chief, opens new tabto turn around its performance, and guide it through a plan announced in May to cut costs and make substantial asset sales by 2028.
Its industry has been hurt as inflation and economic uncertainty dampen demand in key markets, as some consumers look for alternatives to alcoholic beverages, and as U.S. President Donald Trump's tariffs disrupt business.
"Macroeconomic uncertainty and the resulting pressure on consumers continues to weigh on the spirits sector," Diageo said in its first set of results under interim CEO Nik Jhangiani.
Spirits exported to the U.S. from the European Union are subject to a 15% baseline tariff as part of a trade deal agreed last week, though major players including Diageo, Pernod Ricard (PERP.PA), opens new tab, Remy Cointreau (RCOP.PA), opens new tab and Campari (CPRI.MI), opens new tab are pinning their hopes on exemptions.
Diageo forecast organic sales would fall slightly in the first half of its 2026 financial year - which runs to end-June 2026 - with growth more weighted towards the second half.
Organic sales increased 1.7% in fiscal 2025, beating analysts' average forecast of 1.4% in a company poll.
The company now expects to save about $625 million under its 'Accelerate' programme, including from lower advertising and promotional spend and supply chain efficiencies, up from $500 million previously.
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