19-05-2025
- Business
- Wall Street Journal
Diageo Sticks With Guidance Despite Tariff Hit
Diageo DGE -0.28%decrease; red down pointing triangle expects U.S. trade tariffs to result in an unmitigated $150 million hit on its profit and reiterated its guidance for the year as the ripple effects from global trade wars cast a cloud on the U.K. booze giant's efforts to turn around its performance.
The company behind Johnnie Walker whisky, Guinness beer and Smirnoff vodka on Monday said this impact is included in its guidance for fiscal 2025 and fiscal 2026. It added that around half of the hit on its operating profit will be offset by current and future mitigating actions such as increasing prices, managing inventory, reallocating investments and optimizing its supply chain.
The estimate assumes that the current 10% tariff on U.K. and European imports into the U.S. stay in place and that Mexican and Canadian spirits imports into the country remain exempt, it added.
For the three months ended March 31, it posted $4.38 billion in reported net sales, a 2.9% increase compared with a year prior as positive organic growth was partly offset by unfavorable foreign exchange and disposals.
Organic net sales grew 5.9% on phasing, while volumes increased 2.8% on-year, it added.
'We…are on track to deliver on our guidance of sequential improvement in organic net sales performance in the second half of fiscal 25,' Chief Executive Debra Crew said. Diageo continues to expect a slight decline in organic operating profit for the second half of the year ending in June.
Write to Elena Vardon at
