Diageo Withdraws Sales Target Amid Tariffs
Diageo, the world's largest spirits company, has abandoned its mid-term organic sales growth target due to geopolitical uncertainty and tariffs.
The move follows weekend tariffs imposed by President Trump on China, Canada, and Mexico. Diageo acknowledged the complexity these tariffs create in forecasting future performance.
CEO Debra Crew emphasized that the company is exploring strategies to mitigate the impact, including pricing adjustments, inventory management, and supply chain optimization.
Diageo's tequila and Canadian whisky exports to the US are expected to be significantly affected by the tariffs.
Despite the challenges, Diageo's organic sales saw a 1% increase from July to December 2024, outperforming analyst expectations.
Investors anticipate further revisions to the sales target under new CFO Nik Jhangiani, who joined in September. Consumer caution and a delayed macroeconomic recovery, particularly in North America and China, are also contributing factors.