Diageo has reduced its dividend and lowered its sales outlook as weakening demand for spirits in key markets weighs on the drinks group’s performance, even as strong growth of its stout Guinness is creating supply constraints in London pubs.
The announcement came alongside the company’s interim results for the six months ending December 2025 under new chief executive Sir Dave Lewis, who assumed the role in January following the resignation of Debra Crew in 2025 (inside.beer, 10.11.2025). Lewis moved quickly to halve the interim dividend to USD 0.20 per share from USD 0.405 a year earlier, describing the step as necessary to strengthen the balance sheet and provide financial flexibility for investment.
For the six-month period, Diageo reported sales of USD 10.5 billion, representing a decline of 4% compared with the previous year. Operating profit fell 1.2% to USD 3.1 billion. The company’s shares dropped sharply following the announcement, extending a longer-term decline in its market value.
The downturn was largely driven by weaker demand in key spirits markets. Sales in North America declined by 7.4%, while China saw a sharper fall of 13%. By contrast, Europe recorded growth of 4.9%, and Latin America showed signs of recovery.
According to Lewis, consumer behaviour is shifting as households face tighter budgets and many drinkers reduce the number of alcoholic beverages consumed per occasion. The company is also navigating changing lifestyles and a growing trend toward low- and no-alcohol alternatives. In response, Diageo plans to introduce smaller pack sizes and adjust its portfolio to better address consumer price sensitivity.
Despite the broader slowdown, Guinness continues to perform strongly. The stout has gained popularity among younger drinkers and on social media, contributing to rising demand in several markets. (inside.beer, 6.12.2024). However, the surge in popularity has created capacity constraints in London pubs.
Lewis described the brand as a key growth driver and said Diageo intends to invest further in production capacity and operational capabilities to address the supply limitations. The company also expects organic sales to decline by 2–3% in 2026, while organic operating profit is forecast to remain broadly flat.
