As part of its trading update for the first quarter of the 2025/26 financial year, Diageo reiterated the guidance it had previously provided to the market, specifying that its outlook assessments are based solely on previously disclosed public information and widely available data. The company also clarified that no new information is being introduced and that no commentary on current trading trends or further guidance updates will be provided.
For the full-year 2025/26 financial year, the group expects organic net sales growth to be flat or slightly lower, incorporating the negative impact of Chinese White Spirits and a weaker-than-initially assumed consumer environment in the United States. Organic operating profit growth is expected to be low to mid-single digits, supported by positive operating leverage and savings from the Accelerate program, while also factoring in the effects of geographic mix, market dynamics, and tariffs.
Financially, Diageo estimates a tax rate of around 25% and an effective interest rate of approximately 4%. Capital expenditure is expected to be at the low end of the forecast range, between $1,2 billion and $1,3 billion, while free cash flow is expected to be around $3 billion, including exceptional costs related to the Accelerate program.
In the first quarter of the 2025/26 fiscal year, organic net sales were stable overall, with volume growth offsetting a negative contribution from price and mix. Geographically, North America experienced a decline due to slowing spirits consumption, while Europe showed sustained growth thanks to improved commercial execution. In Asia Pacific, the weakness of Chinese White Spirits weighed, partially offset by double-digit growth in India. Performance was positive in Latin America and Africa.
Overall, the group confirms a strategy focused on cost discipline, cash generation, and progressive deleveraging, in a macroeconomic and consumer context that remains heterogeneous across geographical areas.
