Diageo plc (DGE.L), a leading producer of alcoholic beverages, announced on Tuesday a 12% decline in its first-half profits attributable to shareholders, totaling $1.94 billion compared to $2.21 billion in the previous year.
The basic earnings per share fell to 87.1 cents, marking a 12% decrease from last year's 98.6 cents. Meanwhile, basic earnings per share before exceptional items declined to 97.7 cents from 108.1 cents in the prior year.
The company's operating profit saw a 5% drop year-over-year, amounting to $3.16 billion. Net sales also experienced a slight decrease of 1%, reaching $10.90 billion compared to $10.96 billion the previous year. However, organic net sales saw a 1% increase, driven by favorable pricing and mix dynamics, although this was slightly counterbalanced by a 0.2% reduction in volume.
Total volume decreased by 1% to 122.8 EUm, down from 124.6 EUm the year before.
Additionally, Diageo announced an interim dividend of 40.50 cents per share, consistent with the previous year, to be distributed to holders of ordinary shares and US ADRs registered as of February 28.
Looking forward, the company's outlook for the second half will consider the recent imposition of tariffs in the United States. Prior to these tariffs, Diageo had anticipated building upon the momentum of the first half with a sequential improvement in organic net sales growth in fiscal 25's second half.
Similarly, prior expectations indicated a slight decline in organic operating profit for the latter half of fiscal 25, mirroring the first half's drop, before the introduction of tariffs.
Diageo remains optimistic about sustaining robust market share performance. However, due to current macroeconomic and geopolitical uncertainties impacting many of its principal markets, the company has withdrawn its previous guidance for 5-7% organic net sales growth in the medium term. Instead, Diageo plans to offer regular short-term guidance and updates on its trading performance in the future.
