Diageo Cuts Sales, Profit Forecasts and Dividend

Diageo, the world's largest spirits producer and maker of brands including Guinness and Johnnie Walker, lowered its full-year sales and profit forecasts for the second time in four months and reduced its dividend payout, as its latest half-year results revealed ongoing weakness in U.S. and Chinese markets.

The London-based company reported a 2.8 percent decline in underlying sales and operating profits for the six months ended December 31, with profits falling to $3.26 billion. The downturn was driven primarily by softer demand in North America and Asia, where consumers faced economic pressures and shifting preferences. In the U.S., sales dropped 9.3 percent, with premium tequila brands like Don Julio, a key growth driver in recent years, seeing volumes decline by more than 23 percent.

New Chief Executive Dave Lewis, who assumed the role in January after the sudden departure of predecessor Debra Crew, attributed the U.S. challenges to reduced disposable income and increased competition from lower-priced alternatives. "U.S. spirits performance reflected pressure on disposable income, and competitive pressure from more affordable alternatives addressing a more stretched consumer...