Key Takeaways Diageo's 1H26 EPS fell 2.5% as organic sales dropped 2.8% and North America remained weak.Tequila slid in the US, with Don Julio and Casamigos down double-digit on consumer downtrading.Diageo sees FY26 organic sales down 2-3% but reiterates $3B free cash flow guidance.Diageo plc (DEO) reported interim results for the first half of fiscal 2026, which ended Dec. 31, 2025, wherein pre-exceptional earnings per share declined 2.5% year over year to 95.3 cents. This was mainly due to reduced organic ...

Core Viewpoint - Diageo PLC reported a decline in earnings and announced a significant dividend cut as part of a strategic reset under new CEO Sir Dave Lewis to enhance financial flexibility and support investments in competitiveness and portfolio growth [1][3]. Financial Performance - Adjusted basic earnings per share for the half-year ended December 31, 2025, were 95.3 cents, down 2.5% year-over-year [1]. - Net sales reached $10.46 billion, reflecting a 4.0% decline on a reported basis and a 2.8% decline organically [1]. - Organic operating profit declined 2.8% to approximately $3.256 billion, consistent with sales trends [2]. Dividend and Guidance - The interim dividend was halved to 20 cents per share from 40.5 cents, reflecting a revised payout policy targeting 30-50% of earnings [1]. - Diageo updated its fiscal 2026 outlook, now expecting organic net sales to decline 2-3% and organic operating profit growth to be flat to up low-single-digits [3]. Market Dynamics - The organic decline was primarily driven by weakness in North America, particularly in the U.S. spirits and tequila categories, and continued softness in Chinese white spirits [2]. - Strong growth was noted in Europe, Latin America & Caribbean, and Africa, partially offsetting declines in other regions [2]. Strategic Initiatives - The company is targeting around $3 billion in free cash flow and emphasizes deleveraging efforts, including proceeds from planned disposals [4]. - New CEO Sir Dave Lewis highlighted the need to address weak demand and enhance competitiveness while framing the dividend rebase as a step towards building flexibility for a turnaround [6]. Financial Metrics - Diageo's trailing price-to-earnings (P/E) ratio is around 20-21x, with a price-to-sales ratio of approximately 2.4x and enterprise value to sales around 3.5x [5]. - Debt-to-equity remains elevated at roughly 2.2x, with a current ratio of 1.63 indicating solid short-term liquidity [5].

Consumers are drinking ‘fewer servings per occasion’, according to Diageo - Eddie Mulholland/Neil Watson A “very significant” squeeze on disposable income is forcing Britons to cut back on drinking, the maker of Guinness has warned. Diageo, which is one of Britain’s biggest pub suppliers, said the country’s economic malaise was the biggest factor in falling alcohol consumption. Consumers are drinking “fewer servings per occasion”, the company said, although the number of times per month that people dran ...

Diageo is home to brands such as Guinness, Johnnie Walker and Smirnoff Vodka. - CLODAGH KILCOYNE/REUTERS Diageo shares fell after the Guinness maker cut its guidance for the year on weakness in the U.S. and slashed its dividend to help fund the turnaround plan of Chief Executive Officer Dave Lewis. Home to brands like Johnnie Walker and Smirnoff, Diageo has been beleaguered by sales weakness over the past two years, as price inflation bites into consumers’ spending power and growing health consciousness ...

Diageo (NYSE:DEO) H1 2026 Earnings call February 25, 2026 04:30 AM ET Company ParticipantsChris Pitcher - Head of Consumer Staples ResearchDave Lewis - CEOJames Edwardes Jones - Managing DirectorLaurence Whyatt - Managing DirectorMatthew Ford - VP of Equity ResearchMitch Collett - DirectorNik Jhangiani - CFOSonya Ghobrial - Global Head of Investor RelationsConference Call ParticipantsAndrea Pistacchi - Senior AnalystEdward Mundy - Managing Director and Senior Equity AnalystFintan Ryan - Consumer Equity Rese ...

Diageo (NYSE:DEO) H1 2026 Earnings call February 25, 2026 04:30 AM ET Company ParticipantsChris Pitcher - Head of Consumer Staples ResearchDave Lewis - CEOJames Edwardes Jones - Managing DirectorLaurence Whyatt - Managing DirectorMitch Collett - DirectorNik Jhangiani - CFOSonya Ghobrial - Global Head of Investor RelationsConference Call ParticipantsAndrea Pistacchi - Senior AnalystEdward Mundy - Managing Director and Senior Equity AnalystFintan Ryan - Consumer Equity Research AnalystGen Cross - Director and ...

Diageo (NYSE:DEO) H1 2026 Earnings call February 25, 2026 04:30 AM ET Speaker10Hello, everyone, thank you for joining the Diageo F26 Interim Results call. My name is Lucy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. It is now my pleasure to hand over to your host, Sonya Ghobrial, Global Head of Investor Relations, to begin. Please go ahead. ...

Interim Results Fiscal 26 Sir Dave Lewis, CEO & Nik Jhangiani, CFO 25 FEBRUARY 2026 Cautionary statements concerning forward-looking statements and non-GAAP financial measures The following presentation contains 'forward-looking' statements. These statements can be identified by the fact that they do not relate only to historical or current facts and may generally, but not always, be identified by the use of words such as "will", "anticipates", "should", "could", "would", "targets", "aims", "may", "expects" ...

Diageo (NYSE:DEO) H1 2026 Earnings call February 25, 2026 02:05 AM ET Company ParticipantsDave Lewis - CEO and Executive DirectorNik Jhangiani - CFODave LewisGood morning, welcome to the Diageo Interim Results presentation. As you know, it's my first results session for Diageo. In fact, this is my seventh week. I'll share a few initial impressions and immediate priorities with you later. First, I'd like to hand over to Nik to share with you the results of the first half of 2026. Nik?Nik JhangianiThank you, ...

Diageo (NYSE:DEO) H1 2026 Earnings call February 25, 2026 02:05 AM ET Company ParticipantsDave Lewis - CEO and Executive DirectorNik Jhangiani - CFODave LewisGood morning, welcome to the Diageo Interim Results presentation. As you know, it's my first results session for Diageo. In fact, this is my seventh week. I'll share a few initial impressions and immediate priorities with you later. First, I'd like to hand over to Nik to share with you the results of the first half of 2026. Nik?Nik JhangianiThank you, ...