Diageo has reported a 27.2% drop in reported operating profit to $3.16 billion (£2.37bn) for the year ended June 30, 2026, after booking $2.53bn (£1.9bn) in exceptional charges. The results were published on August 6 alongside the company’s Capital Markets Day, and show Scotch and Guinness growing while tequila, Canadian whisky and American whiskey declined.
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READ THE STORYReported net sales fell 3% to $19.64bn (£14.73bn). On an organic basis, which strips out currency movements and disposals, net sales declined 2%.
Scotch was among the stronger performers. Volumes rose 3% and organic net sales rose 2%, with reported net sales up 5%. The category accounts for 24% of Diageo’s net sales, making it the group’s largest.
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Johnnie Walker organic net sales grew 2%, supported by double-digit growth in Türkiye and India. In Türkiye, Diageo said Red Label and Black Label expanded distribution and increased visibility.
Buchanan’s grew faster still, with volumes up 14% and reported net sales up 21%. Colombia drove that performance. The picture was different in the U.S., however, where Buchanan’s net sales fell 7.3%.
Overall U.S. Scotch net sales declined 1.1%. Johnnie Walker rose 1% there and single malts also grew, offsetting the Buchanan’s decline.
Canadian whisky moved the other way. The category’s net sales fell 15% globally, while Crown Royal U.S. net sales fell 15.9%. Diageo attributed this to softness in Crown Royal Deluxe and to lapping strong prior-year comparatives for Crown Royal Blackberry.
American whiskey, which represents 2% of net sales, saw volumes fall 6% and net sales fall 8%.
Indian-made foreign liquor whisky volumes declined 5%, with net sales flat. McDowell’s was affected by excise policy changes in Maharashtra, which increased duties and introduced state-made liquor.
Elsewhere in the portfolio, tequila declined 16%. Don Julio U.S. net sales fell 19.2% and Casamigos fell 27.7%, with both brands losing share. Chinese white spirits fell 47% after government policy changes affected the category.
North America, which represents 37% of net sales, saw organic net sales fall 8.4%.
The exceptional charges comprised $1.49bn in impairments and $908 million in restructuring costs. The largest impairment was $786m against the Türkiye business, with $287m written off the Don Papa rum brand.
Excluding those charges, operating profit before exceptional items rose 2% organically to $5.68bn, helped by a 13.1% reduction in marketing spend. Earnings per share before exceptional items rose 0.7% to 165.3 cents.
Free cash flow increased $463m to $3.21bn. Diageo recommended a full-year dividend of 50 cents per share, down from 103.48 cents.
“We are pleased with our progress in LAC, Europe and Africa,” said Sir Dave Lewis, chief executive officer. “We are focused on recovering our competitiveness in NAM and we are working through the consequences of Government policy in Chinese white spirits.”
Lewis said a revised operating framework is being rolled out and the savings “will allow us to invest in the turnaround without needing to reduce operating profit.” The program should deliver around $850m over two years from fiscal 2027.
