Diageo Lowers Sales Targets, Citing “Weaker U.S. Consumer Environment”
November 6, 2025Diageo saw flat sales of $4.9 billion in its fiscal first quarter through September, as growth across its Europe, Latin America, and Africa regions was offset by declines in the U.S. and China. The company now expects its full-year organic net sales to come in “flat to slightly down including the adverse impact from Chinese white spirits and a weaker U.S. consumer environment than originally planned for.” Organic operating profit is still expected to be positive by low to mid single-digits.
There had been conjecture that Diageo would also announce its next permanent global CEO this morning in addition to its quarterly results, but there was no news on that front, with interim chief Nik Jhangiani and interim CFO Deirdre Mahlan remaining at the helm.
Diageo’s North America sales came in down 2.7% organically in the quarter to $1.8 billion, on a volume decrease of 2.1% and a price/mix effect of -0.6%. The core U.S. spirits business, which totals 40 million cases annually, according to Impact Databank, saw sales slip 4% in what the company called a challenging consumer landscape.
“While we had planned for a cautious U.S. consumer environment, the overall spirits market was softer than expected, with increased competitive pressure, particularly in Tequila,” Diageo noted. The company’s Tequila business declined by double-digits overall for the quarter, “driven by comparatives, competitive pressure, and category softness.”
U.S. sales lapped tough comps from a year ago, the company said, adding, “We believe overall distributor inventory levels at the end of the quarter were appropriate, reflecting some seasonality as would be typical for this time of year, ahead of OND.” On the plus side, Diageo saw double-digit growth on Johnnie Walker, partially boosted by shipment phasing, as well as gains in the RTS and RTD segments, led by Bulleit and Ketel One cocktails and the new Casamigos RTD. Also, Diageo Beer Co. USA’s sales jumped 9%, propelled by Smirnoff Ice and Guinness.
Diageo also addressed the impact of U.S. tariffs on its business, with the company expecting a cost of $200 million annually before mitigation measures, which will cut the figure approximately in half. “This assumes that the current tariffs remain at 10% on imports from the UK and 15% on imports from Europe, and that Mexican and Canadian spirits imports remain exempt under USMCA, with no other changes to tariffs,” the company said.
“We are not satisfied with our current performance and are focused on what we can manage and control; acting with speed to drive efficiencies, prioritizing investment, and adapting more quickly to an evolving consumer environment,” said Jhangiani, who some see as a likely candidate for the CEO role on a permanent basis. “We are well advanced in sharpening our strategy, and we are developing and already implementing clear plans to drive growth across the broader portfolio, ensuring that we meet relevant consumer occasions of the future.”—Daniel Marsteller
| Diageo—Top Ten Brands in the U.S. | ||||||
| Rank | Brand1 | Origin/Type | Total 2024 U.S. Volume2 |
Control States’ Volume Growth 2025 YTD3 |
||
|---|---|---|---|---|---|---|
| 1 | Smirnoff | Vodka | 7.98 | -3.5% | ||
| 2 | Crown Royal | Canadian Whisky | 7.28 | -3.2% | ||
| 3 | Captain Morgan | Rum | 4.40 | -4.8% | ||
| 4 | Don Julio | Tequila | 3.33 | 22.2% | ||
| 5 | Ketel One | Vodka | 2.50 | 4.1% | ||
| 6 | Casamigos | Tequila | 1.96 | -15.1% | ||
| 7 | Johnnie Walker | Scotch Whisky | 1.80 | -0.3% | ||
| 8 | Bulleit | Bourbon/Rye | 1.67 | -2.6% | ||
| 9 | Baileys | Liqueur | 1.39 | -5.9% | ||
| 10 | Tanqueray | Gin | 1.31 | -2.8% | ||
| Total Diageo | 40.18 | -1.1% | ||||
| 1 Includes flavors; excludes RTDs. 2 Millions of 9-liter case depletions. 3 Year-to-date September. Source: NABCA and IMPACT DATABANK © 2025 |
||||||
Tagged : Bulleit, Casamigos, Don Julio, Guinness, Johnnie Walker, Ketel One
