Diageo Slashes Sales Forecast as US Tariff Saga Ramps Up
Remember when the world thought the wine and whiskey wars were over? Guess again. Diageo, the giant behind Guinness and Johnnie Walker, has just pulled the rug out of its own sales carpet, cutting its target after the US President stirred up more uncertainty around the ongoing tariff battle.
Who’s Feeling the Heat?
- North America — 38% of Diageo’s first‑half sales; think of every bourbon bar and beer label across the US.
- Canada and Mexico — together they contribute 45% of the company’s products; the pipeline from Toronto’s whiskey clubs to Mexico City’s tequila fiestas.
Specifically, Canadian whisky and booze‑branded tequila could be hit hard by any new tariffs that come to light.
Half‑Year Numbers: A Quick Snapshot
- Net sales dipped 0.6% to $10.9 billion— a tiny slide, but enough to get the CFO’s ears ringing.
- Currency woes slid organic sales, so even when the steams of hot booze flow, the exchange rates left a cold chill.
- U.S. tequila was the bright spot, climbing 23% in the same period.
- In the UK, Guinness & Co. sold 2% more, buoyed by the timeless love for the golden brew.
Leadership Sound Bite
Debra Crew, Diageo’s CEO, says the first‑half of fiscal 2025 “took a turn for the better,” flagging a 1% organic net sales lift amid a “challenging industry backdrop.” Yet, the confirmation of US tariffs might shake the positive momentum. “We’re tightening the safety nets” and “talking to the US administration in a big way,” she added.
Market Whisperings
Analysts point to a sharp 20% slide in Diageo’s shares over the last year—by contrast, the FTSE 100 gained 12.7%. The dialogue is a mix of rational speak and a hint of saucy optimism: “If the trade war turns into more posturing than actual penalties, this might just be a golden chance to get in on the action.”
So, after the tariff headline fuss, Diageo’s shares continue to be a “hold” until consumers find their footing; changes could tip the scales.
What’s Next?
- Diageo is negotiating with the U.S. government to keep a handle on potential tariffs.
- They’re diversifying pathways for Australian and Asian markets to balance the hit zones.
- “The brand family’s international reach will be a lifeline,” forecasted the analysts.
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