E-Malt.com News article: North America: Diageo expects North American sales to decline in FY to June 2027

Diageo expects North American sales to decline by a mid-single-digit percentage in the financial year ending June 2027, despite reporting a modest recovery in global sales on 5 November, The Drinks Business reported on November 9.

Diageo’s return to global sales growth has done little to ease concerns about its largest market, where demand for several major spirits brands continues to weaken.

According to its first-quarter trading statement, published on 5 November, organic net sales in North America fell by 3.6% during the three months to 30 September, with volumes declining by 3.7%.

The region accounts for 36% of Diageo’s net sales, making its performance central to the company’s recovery.

For the full financial year, Diageo expects North American organic sales to fall by a mid-single-digit percentage, assuming the wider market contracts by approximately 3%.

The downturn has been particularly pronounced across Diageo’s tequila portfolio.

Don Julio and Casamigos both recorded double-digit sales declines in the US, alongside Canadian whisky brand Crown Royal.

These losses were partially offset by growth in Johnnie Walker, suggesting that demand remains uneven across spirits categories rather than declining uniformly.

The company also reported double-digit growth for Guinness and Smirnoff Ice in the US, providing some resilience outside its core spirits portfolio.

However, a packaging quality issue affecting Casamigos adversely affected Diageo’s spirits-based ready-to-drink business.

The results suggest that Diageo’s recovery will depend partly on improving the competitiveness of its established brands while protecting those categories that continue to attract consumers.

Chief executive Sir Dave Lewis acknowledged that North America remains the company’s principal challenge.

“In North America, we continue to focus on making our offer more competitive, and whilst this remains our biggest challenge, clear actions are underway,” he said.

Diageo has maintained its full-year guidance of broadly flat organic net sales growth and low-to-mid-single-digit growth in organic operating profit.

The company expects approximately 40% of the US$850 million in planned savings from changes to its operating framework to contribute during the current financial year.

It also anticipates realising around 25% of a further US$150 million in savings from supply chain initiatives.

The measures form part of a wider restructuring intended to improve efficiency and profitability while the US market remains subdued.

Outside North America, Diageo reported stronger results.

Organic sales increased by 4.8% in Latin America and the Caribbean, 4.1% in Asia-Pacific and 3.4% in India.

Europe, the Middle East and Africa recorded growth of 2.4%, supported by Johnnie Walker, Baileys and ready-to-drink products.

Across the group, reported net sales increased by 1.2% to US$4.93 billion.

Excluding East African Breweries, which Diageo is in the process of selling to Asahi, organic net sales grew by 0.6%, with volumes declining by 0.1%.

Lewis described the quarterly performance as “a small step in the right direction”.

Diageo’s outlook suggests that a meaningful recovery in North America is unlikely during the current financial year.

The company is forecasting a further decline in regional sales even as it expects to improve its market share relative to the previous year.

However, its trading statement does not provide a timetable for a broader US spirits recovery or explicitly predict that the downturn will continue for several years.


09 November, 2026