By Joshua Kirby
Diageo is scheduled to report results for the first half of its fiscal year on Wednesday. Here is what you need to know.
SALES FORECAST: The maker of Johnnie Walker whisky and Guinness beer should report a 2% slide in sales to $10.565 billion for the six months through December, according to a consensus of estimates compiled by the company.
OPERATING-PROFIT FORECAST: Operating earnings should fall 3.9% organically to $3.21 billion, analysts expect. That would imply a contraction of 58 basis points in the group's operating margin.
Diageo's stock price fell 12.3% during the six months through Dec. 31. It recently traded at 18.59 pounds.
WHAT TO WATCH:
--NEW LEADERSHIP: The update will be the first under new boss Dave Lewis, who took Diageo's reins at the beginning of the year after the company parted ways with Debra Crew after just two years in charge last summer. Chopping and changing in the C-Suite is a symptom of a turbulent market for booze makers, who have endured a long period of downward-trending volumes in many key markets.
Still, Lewis is seen as a safe pair of hands, and could use Wednesday's update to set out changes to management, or outline a strategy. Above all, his arrival at the helm of the Baileys maker could signal a swing back to concentrating on the group's main portfolio, rather than chasing growth in higher-margin premium products, analysts at RBC Capital Markets said following his move into the CEO's chair. "Mainstream is where Lewis has spent his career," they wrote.
--REGIONAL SPLITS: Diageo can hope for better first-half results in some regions than in others, analysts at Barclays wrote in a note ahead of the update. Guinness should continue to have sold well in the U.K. and Ireland, boosting European revenue, Barclays said. By contrast, a glum mood around spirits in the U.S. should hit North America sales, while China should also remain a drag, especially due to the later timing of the Lunar New Year, the analysts said. "We still believe China is structurally challenged," they said.
--LOOKING AHEAD: Diageo lowered its guidance for the full fiscal year in November, citing challenges in China and the U.S. That outlook isn't likely to change, and on longer-term strategy new CEO Lewis may also keep his cards close to his chest, for now, Barclays said. "We think going forward there will be more investment behind the core brands that have historically carried the franchise," the U.K. bank said. "We wait to hear if any snippets of details are passed on at these results."
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
February 24, 2026 06:08 ET (11:08 GMT)
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