Sales fall at Guinness parent Diageo against ‘challenging backdrop’ and US tariffs

Guinness parent, Diageo, has lowered its profit forecast for the current financial year after reporting a 2.2 per cent fall in sales in the three months to the end of September amid a weak consumer environment in the US and China.

On Thursday, the drinks giant, which also makes Johnnie Walker whisky, among other brands, said sales in Europe, Latin America and Africa grew in the first quarter of its financial year.

Guinness sales saw “good growth” over the period, Diageo said, with “high single-digit” growth in Europe, which accounts for 25 per cent of the group’s net sales.

However, the effect was largely offset by weakness in the Chinese white spirits market and a decline in spirits sales, particularly tequila, in the US.

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“While we had planned for a cautious US consumer environment, the overall spirits market was softer than expected, with increased competitive pressure, particularly in tequila,” Diageo said.

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The group said it continues to expect US tariffs to take a $200 million (€173.7 million) bite out of its operating profits in the current financial year.

“This assumes that the current tariffs remain at 10 per cent on imports from the UK and 15 per cent on imports from Europe, and that Mexican and Canadian spirits imports remain exempt ... with no other changes to tariffs,” it said.

The London-listed group said it now expects net sales to be “flat to slightly down” in the 2026 financial year, related to “the adverse impact from Chinese white spirits and a weaker US consumer environment than originally planned for”.

Diageo announced earlier this year that it was seeking cost savings of $625 million over the next three years amid pressure from investors. On Thursday, the group said it is on pace to achieve that target after making “good progress” in its efficiency programme.

Profit growth is expected to be “low to mid single-digit”, it said, partially related to “the impact of tariffs as at this time”.

Diageo has offloaded assets in recent months, including its Guinness Ghana brewery, in which it sold its 80.4 per cent shareholding in July. The group also sold its majority shareholding in Guinness Nigeria last year.