Diageo’s organic net sales up by 1.7 percent

Diageo has recorded a 1.7 percent increase in its organic net sales in the fiscal year ended June 30, 2025. This, according to the company, has been driven by an organic volume growth of 0.9 percent and positive price/mix of 0.8 percent.

However, the company reported a sharp decline in operating and net profits due to exceptional charges and foreign exchange impacts. Net sales also plummeted 0.1 percent year-on-year to USD 20.2 billion, impacted by unfavourable foreign exchange and acquisition/disposal adjustments, partially offset by organic growth and hyperinflationary adjustments.

Reported operating profit also fell by 27.8 percent to USD 4.34 billion, with operating profit margin down by 819 basis points to 21.4 percent. The decline was primarily due to exceptional impairment and restructuring costs, unfavourable FX, and lower organic margins. On an adjusted basis, operating profit before exceptional items stood at USD 5.7 billion, down 0.7 percent, with a margin of 28.2 percent, down 68bps. Excluding the Cîroc impact, organic operating profit declined by 1 percent in line with guidance.

Net profit declined 39.1 percent to USD 2.54 billion, and basic earnings per share (EPS) fell 38.9 percent to 105.9 cents. On a pre-exceptional basis, EPS was 164.2 cents, down 8.6 percent.

Diageo continues to implement its “Accelerate” productivity programme, raising its cost savings target from approximately USD 500 million to USD 625 million over three years. The company reaffirmed its FY26 outlook, expecting organic sales growth to be similar to FY25 and organic operating profit growth in the mid-single-digit range, inclusive of tariff impacts.

Commenting on the results, Interim CEO Nik Jhangiani noted, “We delivered 1.7 percent organic net sales growth, reflecting the strength of our portfolio and diversified footprint. Standout performances from Don Julio, Guinness, and Crown Royal Blackberry were highlights in an otherwise challenging year.” He added that while macroeconomic uncertainty continues to affect the spirits sector, Diageo remains focussed on enhancing agility, cost efficiency, and long-term financial performance.

The company also confirmed a free cash flow target of around USD 3 billion for fiscal 2026, underlining its commitment to balance sheet strength and sustained shareholder returns.