Diageo Reports FY25 Results In Line With Estimates, Sees Flat Sales, $200M Tariff Impact, Raised Cost Savings, New CEO by October

Diageo Plc reported fiscal year 2025 results that aligned with market expectations, delivering net sales of $20.2 billion, slightly below estimates of $20.21 billion. The spirits maker experienced a smaller-than-expected decline in annual profit amid a challenging market environment, including a $200 million impact from tariffs. For fiscal year 2026, Diageo expects organic net sales growth to remain flat compared to fiscal 2025, with organic operating profit growth projected in the mid-single-digit range despite tariff pressures. The company raised its cost savings target by $125 million to a total of $625 million over the next three years, aiming to offset tariff impacts and improve efficiency. Capital expenditures for 2026 are forecasted between $1.28 billion and $1.38 billion, with free cash flow anticipated to be around $38 million. Diageo is also on track to appoint a permanent new CEO by October 2025, following the sudden departure of its previous chief executive. Investor sentiment improved following the results, which suggest a potential turnaround after a period marked by guidance downgrades, missed forecasts, and management concerns.