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last mo.

Diageo Sees 28% Operating Profit Drop and Raises Three-Year Savings Goal

Interim chief Nik Jhangiani is boosting cost savings to £625 million over three years to counter a $200 million tariff hit.

Diageo’s brands include Johnnie Walker whisky
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Overview

  • Diageo reported a 27.8% decline in FY25 operating profit to $4.3 billion, weighed down by write-downs, restructuring charges and currency movements.
  • The company lifted its three-year cost-savings target from £500 million to £625 million to protect margins and fund growth initiatives.
  • For FY26, Diageo forecasts flat net sales growth and mid-single-digit organic profit improvement despite an annual $200 million tariff burden.
  • Sales of flagship brands outperformed overall volumes, with Don Julio tequila up 37% and Guinness stout rising 12% to offset broader weakness.
  • Regional performance was mixed: Travel Retail Asia net sales fell 24.3%, while stronger gains in North America and Latin America helped balance the portfolio.