Diageo faces analyst calls for 'more dramatic action' after wider downgrade than expected
Last updated: 09:45 06 Nov 2025 EST, First published: 09:33 06 Nov 2025 EST
Guinness maker Diageo PLC (LSE:DGE) poured slightly better quarterly results than feared, but the booze maker still disappointed investors by cutting its full-year sales and profit guidance.
First-quarter organic revenue was flat (ahead of forecasts for a 1.3% decline), but the company now expects sales to be “flat to slightly down” for the year to June 2026, with operating profit is only expected to rise by a low-to-mid-single-digit percentage.
The FTSE 100-listed group blamed softer demand in the market for China’s national drink, baijiu, as well as weaker US spirits sales.
UBS said that while the quarter “was not as bad as expected,” but still while investors expected a cut to the top-line, the lower earnings guidance came as a surprise and implies revisions for the City consensus forecast between flat and a low single-digit declines.
As the strong performance in Europe, Latin America and Africa could not offset these pressures, UBS thinks "prolonged weaker industry trends will drive the board/management to realise value through other means".
Jefferies analysts characterised the statement as showing that the company "is doubling down on the controllables to navigate the tough external environment".
AJ Bell said shareholders had been “left drowning their sorrows again,” warning that the results “increase the pressure on the Diageo hierarchy to fill the leadership vacuum” after Debra Crew stepped down as chief executive with immediate effect in July.
While financial chief Nik Jhangiani has taken on the role of CEO on an interim basis, the AJ Bell team said “more dramatic action” may be needed to restore investor confidence.
