By Andrea Figueras

U.K. distiller Diageo is scheduled to report results for its fiscal 2025 on Tuesday. Here is what you need to know.

SALES FORECAST: The maker of Guinness beer is expected to report a 1.4% organic increase in net sales to 20.2 billion pounds ($26.83 billion) for the year ended June, according to a poll of estimates by 20 analysts provided by the company.

OPERATING PROFIT FORECAST: Analysts expect the company to book operating profit of 5.65 billion pounds, down 1.2% organically compared with the prior year.

Shares have plunged nearly 24% over the past 12 months and are down roughly 29% over the year to date.

WHAT TO WATCH

-- OUTLOOK: Diageo appears on track to deliver results for fiscal 2025 against its guidance and consensus expectations, Citi analyst Simon Hales said in a research note. Drinks makers have been grappling with a pullback in alcohol consumption after sales surged during the Covid-19 pandemic. The focus will likely be on its outlook for fiscal 2026, he added. Citi expects top-line guidance to remain subdued with organic net sales growth likely to be flat-to-slightly lower compared with fiscal 2025. The U.K. group has been seeking to rebuild confidence with investors after a major profit warning in 2023 and subdued results since then. Sentiment on Diageo is at the point of peak pessimism, Jefferies analysts wrote in a note to clients, adding that a recovery starts to become more visible.

-- RESTRUCTURING PROGRAM: The market will also focus on any new details around the recently announced restructuring program, Citi said. Investors are likely to welcome any improvement in operating margin leverage helped by cost savings, Hales said. Given the absence of new negatives, there is increasing confidence that Diageo is in control of what it can control, Citi said.

-- TARIFFS: Another key topic will be the impact of President Trump's tariffs. "Distillers often get caught in the crossfire of trade wars, and leading firms have a proven record of successfully mitigating tariff hikes," Morningstar analyst Verushka Shetty said in a note. Diageo has a strong presence in the U.S. in terms of sales, making it one of the distilleries likely to be most affected by the duties, the analyst said. "We expect the impact to be limited with pricing actions," Shetty added. Earlier this year, Diageo said it expected a $150 million hit to profit on an annualized basis before any mitigating action as a result of the levies.

-- LEADERSHIP RESHUFFLE: In July, Debra Crew stepped down as the group's chief executive after two years in the role. Chief Financial Officer Nik Jhangiani assumed the role of CEO on an interim basis, while the company started a search process for a permanent successor. Last week, Diageo appointed Deirdre Mahlan, a former executive of the company, as interim CFO, effective Aug. 18.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

August 04, 2025 05:28 ET (09:28 GMT)

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