C&C Group cuts profit view, shares sink

Core Viewpoint - C&C Group has lowered its fiscal 2026 profit forecast due to weakened consumer confidence following the UK Budget, resulting in a significant drop in share prices to a near 17-year low [1]. Group 1: Profit Forecast and Market Expectations - C&C Group now anticipates an adjusted operating profit of €70-73 million for the fiscal year ending in February, which is below the market consensus expectation of €79.4 million [1]. Group 2: Consumer Behavior and Spending Trends - Tax increases from the UK autumn budget have constrained household budgets, causing consumers to reduce spending on essentials and shift from higher-cost items like wine to cheaper alternatives [2]. - The company reported that demand in the hospitality sector was softer than expected, with consumers favoring beer over wine and spirits [3]. Group 3: Business Strategy and Performance - C&C Group is exiting less profitable businesses and reducing distribution volumes, but it cautioned that the lag between revenue declines and cost reductions will keep fiscal 2027 profits at similar levels [4]. - Despite meeting expectations during the Christmas trading period, January demand has remained weak and is expected to continue through the end of the financial year in February [3].