The world’s largest spirits company has lowered its financial projections for the second time in just four months, while also reducing shareholder payouts as declining sales in the United States and China continue to impact performance.
Diageo, the company behind popular brands including Johnnie Walker whisky and Guinness beer, released its latest financial results under newly appointed CEO Dave Lewis, revealing ongoing struggles in key markets.
“U.S. spirits performance reflected pressure on disposable income, and competitive pressure from more affordable alternatives addressing a more stretched consumer wallet,” Lewis stated in the company’s mid-year earnings report.
Lewis assumed leadership of the beverage giant in January, inheriting significant challenges including high debt levels, tariff uncertainties affecting US operations, declining Chinese market demand, and shifting consumer preferences worldwide.
The leadership change came after former CEO Debra Crew’s sudden departure, which followed disappointing performance in Latin America, slowing global expansion, and mounting investor concerns about the company’s direction and debt management.
The London-based company has revised its 2026 projections, now anticipating organic sales will drop between 2% and 3%, while operating profits are expected to remain flat or show minimal single-digit increases. Previous estimates had called for stable to slightly declining sales with stronger profit growth.
American market performance proved particularly challenging, with overall sales declining 9.3%. Even premium tequila brands like Don Julio, previously a growth driver, saw sales plummet more than 23%.
Shareholders will also feel the impact, as the company announced an interim dividend payment of 20 cents per share, significantly down from 40.5 cents paid during the same period last year. The company established a minimum annual dividend floor of 50 cents.
