Diageo Expects Flat 2026 Sales, Ups Cost-Cut Target

Diageo, the world’s largest spirits producer, reported 1.7% organic net sales growth for the year ended June, in line with expectations despite persistent industry challenges. The company forecasts flat organic sales growth for fiscal 2026, with a slight decline expected in the first half of the year followed by anticipated growth in the second half. Diageo now expects US tariffs to reduce annual profits by $200 million and has raised its cost-savings target to $625 million by 2028, up from $500 million, through reduced advertising, supply chain efficiencies, and asset sales. Interim CEO Nik Jhangiani cited ongoing consumer pressures and inflation impacting the spirits sector. The company continues to search for a permanent CEO and finance chief to steer its turnaround. Diageo and other major spirits companies are seeking tariff relief amid recent trade negotiations, but significant industry uncertainty persists.