6 May 2026
Diageo’s numbers were better than feared rather than outright strong, but given how far expectations and the share price had fallen this will have come as a surprise to some investors. Organic growth of 0.3% is unimpressive in absolute terms, but the geographic mix shows the business is far from broken, with Europe, Latin America and Africa all performing well, the latter two delivering double‑digit growth.
The clear weak spot remains North America, where spirits volumes are under pressure, driven by category issues rather than brand relevance. Tequila has come off several years of strong growth and affordability pressures are pushing consumers to trade down, hitting bottled spirits in particular. Guinness continues to perform well in both the UK and North America, highlighting that this is not a universal demand problem.
The appointment of Dave Lewis gives the group credible leadership and today's figures buy time to execute a turnaround focused on pricing architecture, competitiveness and brand investment, particularly in the US.
Guidance was cut sharply in February, so reiterating it now sets a relatively low bar, pointing to modest sales declines and flat operating profit. That outlook is hardly exciting, but it is achievable. With the spirits market undergoing structural adjustment rather than collapse, Diageo’s portfolio and brand strength look more resilient than a 13x earnings multiple suggests.
