Company Reports

Diageo’s fiscal 2026 results included an organic sales decline of 2% and operating profit growth of 2%, in line with guidance. In its strategy update, Diageo expects low-single-digit revenue growth and mid-single-digit operating profit growth over three years. Shares rose 5% on Aug. 6, 2026.

Diageo’s third-quarter 2026 trading update included an organic net sales increase of 0.3% and a volume increase of 0.4%. All regions reported growth except North America and Asia-Pacific. With results ahead of market expectations, shares rose around 5% in early trading on May 6.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions are part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions are part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo’s first-half fiscal 2026 results included an organic net sales decline of 2.8% and an operating profit decline of 2.8%. Volumes were down in all regions except Africa, and profitability was pressured by negative mix, cost inflation, and tariffs. Shares fell 6% at the market open on Feb. 25.

Diageo's board of directors has appointed Dave Lewis to the chief executive officer role, effective on Jan. 1, 2026. Shares rose 7% at the market open on Nov. 10.

Diageo’s organic net sales were flat in the first quarter of fiscal 2026. Volume increased 2.9% year over year; however, this was fully offset by a 2.8% price/mix decline driven by weak performance in China. Shares fell around 3% at the market open on Nov. 6.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo's organic net sales grew 1.7% and organic operating margin contracted 68 basis points in fiscal 2025, ahead of company-compiled consensus.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

According to the Financial Times, Diageo CEO Debra Crew is stepping down after two years at the helm. Current CFO Nik Jhangiani will act as interim CEO while the firm searches for a replacement. Following the July 16 announcement, the stock rose 4%.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo reported its third-quarter trading update, with reported net sales up 2.9% year over year. Organic revenue growth of 5.9% was partially offset by foreign-exchange headwinds and disposals. Shares were broadly flat at the market open on May 19.

Shares of Diageo, Pernod Ricard, Rémy Cointreau, and Davide Campari-Milano fell on March 13 after US President Donald Trump threatened to impose a 200% tariff on several alcohol products from the European Union. This followed the EU’s retaliation against Trump’s 25% steel and aluminum tariffs in which the EU plans to impose a tariff on US whiskey, along with other industrial and farm products. On March 6, Trump postponed a majority of the 25% tariffs on imports from Mexico and Canada for a month. The situation is dynamic, with uncertainty about the magnitude of the hit to the spirits being exported to the US.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

We maintain our GBX 2,590 fair value estimate for wide-moat Diageo after the firm reported its results for first-half fiscal 2025. Revenue increased ahead of our estimates. However, EPS fell short of our model due to lower-than-expected profitability and a hit from the firm’s noncontrolling stake in Moët Hennessy. Weak consumer confidence and continued headwinds in key markets make the timing of a recovery in the spirits sector uncertain. With this, management removed its medium-term organic revenue growth guidance and anticipates further margin deterioration in the second half of fiscal 2025. We view this as appropriate, but continue to believe Diageo is well positioned to capitalize on long-term secular drivers when the environment turns. While we have tempered our expectations for fiscal 2025, our long-term estimates remain unchanged. Shares fell around 2% following the release, leaving the stock in 4-star territory.

We are transferring coverage of Diageo and Pernod Ricard. For Diageo, we lower our fair value estimate to GBX 2,590/$132 from GBX 3,100/$157. For Pernod Ricard, we lower our fair value estimate to EUR 129 from EUR 185. At current prices, both firms appear modestly undervalued. We see low investor confidence in the spirits industry, given the post-covid demand reset. However, we believe the sector will recover and both firms can reach their medium-term targets. We maintain our wide moat, standard capital allocation, and low uncertainty ratings for both firms.

Diageo was formed in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's fabric, and subsequent transactions have established Diageo as a global industry leader. The largest spirits players have expanded and scaled their portfolios over decades, holding as many as 250 brands, and we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present acquisition opportunities for the industry consolidators, including Diageo, to expand their footprint.

Diageo was created in 1997 following the merger of Grand Metropolitan and Guinness. Mergers and acquisitions remain part of the firm's DNA, and subsequent transactions—some transformative, others bolt-on—have established Diageo as a global industry leader. Although the industry is fairly concentrated (we estimate a four-firm concentration ratio of 0.6, above many other fast-moving consumer goods categories, including the global brewing industry at 0.5), we believe there is more consolidation to come. Outside the top five firms, the industry is highly fragmented, and regional players often dominate in niche product categories or local markets. These firms present a new wave of merger opportunities for the industry consolidators, including Diageo, to grow their developing markets footprint.