Name: Diageo cuts guidance after reporting a weak quarter
Uploaded: 2025-11-07T02:02:20.401Z
Duration: 2 min 47 s
Description: A sobering quarter from the world’s biggest spirits maker Diageo. CNBC’s Brandon Gomez digs into why the company behind labels like Johnnie Walker, Guinness, Don Julio and more is slashing its sales and profit outlook for the year.

A sobering quarter from the world’s biggest spirits maker Diageo. CNBC’s Brandon Gomez digs into why the company behind labels like Johnnie Walker, Guinness, Don Julio and more is slashing its sales and profit outlook for the year.

Diageo, the company behind brands such as Johnny Walker, Guinness, and Don Julio, has reduced its sales and profit outlook after reporting a weaker-than-expected quarter. Net sales fell 2% year-over-year to $4.9 billion, with organic sales flat and volumes up nearly 3%, but pricing and product mix weighed on results. The company cited significant declines in China and the US, where consumers are trading down from premium brands to cheaper alternatives, and noted a broader industry slowdown due to inflation, moderation trends, and tariffs.

Diageo's leadership remains in transition following the departure of CEO Debra Crew in July, with no replacement announced. The company highlighted demographic shifts, including reduced alcohol consumption among Gen Z and economic concerns among Hispanic American consumers, as additional challenges. Investors are advised to await further guidance after the holiday season, which is a critical period for sales.

Diageo cuts guidance after reporting a weak quarter

Welcome back a sobering update from the world's biggest spirits maker It's Diageo the company behind labels like Johnny Walker and Guinness and Don Julio tequila and more Slashing its sales and profit outlook after reporting a weaker quarter shares now are now trading at their lowest level in roughly a decade So let's bring in our own spirits and alcohol industry reporter Brandon Gomez with highlights from the quarter What exactly was the impetus for the negativity around this particular? Yeah, absolutely, and they raised a new red flag which we'll get into here But first net sales came in at four point nine billion now that's down 2% year-over-year Organic sales flat better than analysts feared but pricing and product mix took a toll volumes actually up nearly 3% But not enough to lift results now Latin America was a bright spot with strong demand in Brazil But the biggest hangover markets China and the US China sales dropped more than 7% while drinkers here in the States Traded down faster than a college bar crowded at last call organic sales falling nearly 3% here Diageo saying drinkers are swapping out premium tequilas like Don Julio and Casa Migos for cheaper pours now that Dom is what's new For a while tequila and mezcal have been the resilient labels with whiskey and beer under pressure But the company's interim CFO calling it a quote clear shift down in quality as consumers tighten their wallets in tabs as well And because the company caused the company rather to cut guidance a Diageo isn't alone The entire premium spirits industry is feeling a post-pandemic hangover inflation weary consumers moderation trends and tariffs shaking up global trade Mixing Diageo's leadership remains in flux CEO Deborah crew left in July with no replacement in sight for now Though Diageo's message to investors is wait for more guidance after the holidays q4 Of course the most important for booze sales with all the holidays loaded in New Year's Christmas Where exactly are we though seeing you mentioned some of the weaker areas in in quarters past? We've highlighted some of the demographic shifts and demographic consumption trends that are happening Do any stand out for Diageo does it continue to echo what companies like Constellation Brands have told us in the past as well? Yeah, absolutely I mean again We're probably referring to Gen Z consumers who are drinking less you obviously hear all the fitness trends and prioritization of health and wellness in That demographic you've also heard from a lot of the other companies about the Hispanic American consumer Constellation Brands that's a core demographic for that makes up 50% of their beer business and you can see here some of the comments that Companies have made this quarter so far Constellation Brands saying 80% of those surveyed Hispanic and non-hispanic consumers worried about the economy Molson Coors Boston beer also weighing in on the weakness in Hispanic American consumers and it extends beyond beer You heard from Colgate Palmolive PepsiCo talking about that demographic, too Yeah, it's one of the reasons why Modelo no longer the world the best-selling beer in America It's now Michelob Ultra for those trends as well. Yeah, Brandon Gomez. Thank you very much. Thanks. All right

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