Diageo reported a 5.9% growth in organic net sales for the third quarter, benefiting from North American customers purchasing in anticipation of tariffs. Despite this temporary boost, which is projected to reverse, the company maintains its guidance for the full year. The launch of a productivity program aims to achieve $3 billion in free cash flow and $500 million in savings by FY26. CEO Debra Crew's focus on restoring investor confidence amid challenging market conditions suggests a strategic pivot toward improving profit margins and overall cash performance.
Diageo's strong performance in the third quarter was significantly flattered by a number of one-offs, most notably a pull-forward of purchasing in anticipation of tariffs in North America.
Despite the challenging market backdrop, Diageo has reiterated its full-year guidance. The impact of tariffs appears manageable, for now at least.
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