The company is also ramping up its cost-cutting efforts amid uneven trends in drinking out and overall liquor sales.
Diageo’s U.S.-listed shares rose 5.6% premarket on Tuesday, after the British liquor giant said it will maintain 1.7% organic sales growth this year and increase its cost-saving initiative.
Shares were as much as 7% higher on the London Stock Exchange at the time of writing.
Diageo’s outlook for the fiscal year ending June 2026, which came in slightly above Wall Street’s estimates, is based on the expectation of pricing and volume growth, according to a Bloomberg report.
The company, known for its Johnnie Walker whiskey and Smirnoff vodka, said FY25 revenue declined by 0.1% to $20.25 billion. On an organic basis, sales rose 1.7%. Profit for the year was $1.642 per share, ahead of the expectation of $1.616.
Diageo, like its competitors, has been navigating economic uncertainty and concerns that the U.S. tariffs would drive up inflation. The company now anticipates a $200 million yearly impact from those duties, up from $150 million previously.
Interim CEO Nik Jhangiani said Diageo would expand its cost-saving program to $625 million over three years, up from its previous target of $500 million.
While the consumer environment remained tough, customers, particularly Gen Z, continued to spend and go out, but were focusing more on non-alcoholic drinks and ready-to-drink cocktails, Jhangiani said in a comment to the media, according to Bloomberg.
Meanwhile, Diageo’s board will likely make a decision on a permanent CEO toward the end of October, Jhangiani added. Former CEO Debra Crew exited abruptly last month.
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