"For the six months to December 31, Diageo reported a 2.8% drop in underlying operating profits to 3.26 billion dollars (£2.4 billion) with 2.8% decline in underlying sales. The results underline continued pressure on the company's core markets, particularly in the United States, where consumer demand has weakened, and inventory adjustments have weighed on performance."
"Given the ongoing trading challenges, Diageo has now downgraded its full-year guidance for the second time in three months, and the company is outlining specific strategic initiatives to improve future performance. Sales are expected to fall 2% to 3% for the year, and earnings are forecast to be flat or rise only in the low single digits."
"Sir Dave emphasised the importance of transparent and decisive actions to stabilise performance and rebuild investor confidence, aiming to foster trust during this challenging period. In a move likely to disappoint investors, Diageo said it would more than halve its interim dividend, primarily to strengthen its balance sheet and fund restructuring efforts."
Diageo, the global drinks company behind Guinness and Johnnie Walker, reported a 2.8% decline in underlying operating profits and sales for the first half, prompting a second downgrade of full-year guidance in three months. The company faces significant pressure in the United States, its largest market, where consumer demand has weakened and inventory adjustments have impacted performance. New CEO Dave Lewis, formerly of Tesco, pledged decisive action to revive the business. Diageo expects sales to fall 2-3% annually with flat to low single-digit earnings growth. The company is implementing cost-saving measures and delivering approximately 50% of planned savings this financial year. To strengthen the balance sheet and fund restructuring, Diageo more than halved its interim dividend, signaling a cautious approach to shareholder returns during this challenging period.
#financial-downgrades #dividend-cuts #us-market-weakness #corporate-restructuring #leadership-strategy
Read at London Business News | Londonlovesbusiness.com
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