Diageo plc (DGE.L) — Company Research

Last Updated: 24 October 2026

Diageo plc is one of the world's largest makers of alcoholic drinks. Its brands include Johnnie Walker, Guinness, Smirnoff, Don Julio, Casamigos, Crown Royal, Tanqueray, Captain Morgan and Baileys, sold in nearly 180 countries. Diageo is listed in London, with American Depositary Shares on the New York Stock Exchange (DEO), and reports in US dollars for years to 30 June. Since the last version of this report (8 June 2026) Diageo has reported a 2% fall in organic net sales for FY2026, held its first Capital Markets Day under Chief Executive Sir Dave Lewis, set out a new cost programme and medium-term targets, named a new Chief Financial Officer and moved to a new regional structure. The Q1 FY27 trading statement and AGM are due on 5 November 2026. Every figure below comes from Diageo's results announcements, Form 20-F, RNS notices and SEC XBRL data. There are no analyst opinions, price targets or ratings anywhere in it.

Share prices, and figures worked out from them, are not shown for London-listed companies on ChartsView.

1. Company Snapshot

Field	Value
Ticker / exchange	Diageo (DGE) — London Stock Exchange; American Depositary Shares on NYSE (DEO)
Sector	Consumer staples — spirits and beer
Revenue (FY2026, year to 30 Jun 2026)	Net sales US$19,643m, down 3.0% reported and 2.0% organic; gross sales including excise duties US$27,762m
Operating profit (FY2026)	US$3,156m reported (down 27.2% after US$2,527m of exceptional charges); US$5,683m before exceptionals, up 2.0% organic
Earnings per share (FY2026)	Pre-exceptional EPS 165.3 US cents; basic EPS 78.1 US cents
Net profit (FY2026)	US$1,958m
Employees	About 27,900 on average in FY2026 (Form 20-F regional breakdown); the company describes itself as having more than 27,500 employees
CEO / Leadership	Sir Dave Lewis, Chief Executive Officer (since 1 Jan 2026); Nik Jhangiani, Chief Financial Officer; Sir John Manzoni, Chair
Headquarters	London
Reporting currency	US dollar (US$)

2. The Bull and Bear Case

Bull Case

• Guinness momentum: Guinness organic net sales grew 12% in FY2026 and beer, now 18% of net sales, grew 9%; management is putting more investment behind the brand.
• Cost savings ahead of plan: the Accelerate programme delivered US$540m of savings by the end of FY2026, and a new operating framework targets about US$850m more over FY27–28 plus about US$150m from supply chain.
• Cash flow and disposals: free cash flow rose by US$463m to US$3,211m in FY2026, and the sale of Diageo Kenya (owner of 65% of East African Breweries) to Asahi for about US$2.3bn and the Royal Challengers Bengaluru sale are expected to cut debt.
• Clear medium-term targets: the August 2026 Capital Markets Day set FY27–29 targets of low-single-digit organic sales growth, mid-single-digit organic operating profit growth and about US$8bn of cumulative free cash flow.
• Growth outside the US: in FY2026 organic net sales grew 3.4% in Europe, 7.7% in Latin America and Caribbean and 13.3% in Africa.

Bear Case

• North America and tequila weakness: North America, 37% of net sales, fell 8.4% organically in FY2026; tequila fell 16%, with Casamigos down 25% and Don Julio down 14%, and FY27 guidance has North America down mid-single digits.
• Dividend cut: the interim dividend was cut from 40.5 cents to 20 cents in February 2026, and the FY2026 total of 50 cents compares with 103.48 cents for FY2025.
• High leverage: net borrowings were US$20,482m at 30 Jun 2026 and leverage was 3.1 times adjusted EBITDA, above the 2.5–3.0 times target range.
• Large write-downs: FY2026 exceptional charges of US$2,527m included US$1,489m of impairments (Türkiye US$786m, Don Papa US$287m) and US$908m of restructuring costs.
• Flat outlook: FY27 guidance is for broadly flat organic net sales, and Chinese white spirits fell 47% and Asia Pacific 6.3% organically in FY2026.

3. Business Segments

The table shows FY2026 reported net sales by region on the structure used for FY2026. From FY27 Diageo reports North America, EMEA, APAC excluding India, Latin America and Caribbean, and India as separate regions (restated figures published 13 Oct 2026).

Segment	% of revenue	What it is
North America (US$7,249m)	37%	US and Canada. Crown Royal, Don Julio, Casamigos, Johnnie Walker, Smirnoff, Captain Morgan. Organic net sales down 8.4%.
Europe (US$5,097m)	26%	Includes Great Britain, Ireland and Türkiye. Guinness is the largest brand. Organic growth 3.4%.
Asia Pacific (US$3,333m)	17%	Includes India (United Spirits), China and travel retail. Organic net sales down 6.3%.
Latin America and Caribbean (US$2,160m)	11%	Scotch and other spirits, led by Brazil and Mexico. Organic growth 7.7%.
Africa (US$1,642m)	8%	Beer and spirits, including East African Breweries and Nigeria. Organic growth 13.3%.

By category, Scotch was 24% of FY2026 net sales, beer 18%, tequila 12%, vodka 8% and Canadian whisky 6%; spirits as a whole were 75%. Follow consumer-staples names on the ChartsView Live Charts page.

4. Business Model and Moat

How it makes money. Diageo distils, brews, bottles and markets drinks, selling them to distributors, wholesalers and retailers. Governments take a large share of the price as excise duty: in FY2026 gross sales were US$27,762m and excise duties US$8,119m, leaving net sales of US$19,643m. Growth is reported as organic net sales, split into volume and price/mix; in FY2026 volume fell 0.4% and price/mix 1.6%.

Unit economics. Premium brands sell at high prices relative to production cost, so the operating margin before exceptionals was 28.9% in FY2026, up 116 basis points organically. Scotch has to be aged for years, so Diageo holds large stocks of maturing whisky, which ties up cash.

The moat. Brands built over generations, aged-whisky stocks that cannot be replicated quickly, and global distribution give Diageo shelf space and pricing power. Rivals with similar brand portfolios, such as Pernod Ricard, share that moat, and consumers can move away from a category quickly, as tequila showed in FY2026.

Capital allocation. After the February 2026 cut, the dividend policy targets a payout of 30–50% of earnings with a floor of 50 cents a year. Priorities are investment in brands and Guinness capacity, bringing leverage back to the middle of the 2.5–3.0 times range by the end of FY27, and selling non-core assets.

5. Financial Health

Diageo has reported in US dollars since FY2024; FY2022 and FY2023 net sales are the US dollar figures restated in the FY2024 financial statements. Long-term debt is non-current borrowings at each year end, checked against Diageo's SEC XBRL filings (ifrs-full:LongtermBorrowings, CIK 0000835403) for FY2022 to FY2025; FY2026 is from the preliminary results because the FY2026 XBRL data was not yet in the SEC companyfacts file.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2022†	20,516	+21.4% (sterling basis)	140.2p	151.9p	76.18p	$17,543m
FY2023	20,555	+0.2%	196.3c	196.5c	98.55c	$18,649m
FY2024	20,269	−1.4%	173.2c	179.6c	103.48c	$18,616m
FY2025	20,245	−0.1%	105.9c	164.2c	103.48c	$20,820m
FY2026	19,643	−3.0%	78.1c	165.3c	50.0c	$19,062m

† FY2022 net sales are shown in US dollars as restated in the FY2024 financial statements; the YoY movement, EPS and dividend are as originally reported in sterling (pence), because Diageo did not restate them in dollars. Revenue is net sales (sales less excise duties). GAAP EPS is basic EPS; Adjusted EPS is Diageo's pre-exceptional EPS. FY2026 dividend is a 20c interim plus a 30c final. Net borrowings were US$17,107m (FY2022), US$19,582m (FY2023), US$21,017m (FY2024), US$21,854m (FY2025) and US$20,482m (FY2026).

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q4 FY26 (Apr–Jun 2026)	4,707	Half-yearly only	Half-yearly only
Q3 FY26 (Jan–Mar 2026)	4,477 (organic +0.3%)	Half-yearly only	Half-yearly only
H2 FY26 (Jan–Jun 2026)	9,183 (organic −1.0%)	Not published	Not published
Q2 FY26 (Oct–Dec 2025)	About 5,585 (derived: H1 less Q1)	Half-yearly only	Half-yearly only
Q1 FY26 (Jul–Sep 2025)	4,875 (organic flat)	Half-yearly only	Half-yearly only
H1 FY26 (Jul–Dec 2025)	10,460 (organic −2.8%)	95.3c	89.7c
FY2026 total	19,643	165.3c	78.1c

Quarterly net sales come from Diageo's FY27 Q1 Aide Memoire (13 Oct 2026). Diageo reports earnings only at the half and full year; H2 EPS was not published separately. Q1 FY27 figures are due on 5 November 2026.

Cash flow and balance sheet. In FY2026 net cash from operating activities was US$4,392m (FY2025: US$4,297m), purchases of property, plant and equipment and computer software were US$1,197m (net capex US$1,181m) and depreciation, amortisation and impairment was US$2,480m, inflated by the impairments. Free cash flow on Diageo's definition was US$3,211m. At 30 Jun 2026 cash and cash equivalents were US$1,520m, borrowings due within one year US$2,449m, borrowings due after one year US$19,062m and net borrowings US$20,482m. SEC XBRL data confirms FY2025 operating cash flow of US$4,297m, cash of US$2,200m and net borrowings of US$21,854m.

FY27 guidance (6 Aug 2026). Broadly flat organic net sales, with North America down mid-single digits; organic operating profit up low to mid-single digits; free cash flow of about US$2bn after about US$850m of exceptional cash costs; capex of about US$1.25bn; a tax rate of about 25%; and leverage around the middle of the 2.5–3.0 times range by the end of FY27.

6. Valuation Metrics

Raw metrics, October 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Free cash flow	US$3,211m in FY2026 (Diageo definition: operating cash flow US$4,392m less net capex US$1,181m); about US$2bn guided for FY27
Operating profit before exceptionals	US$5,683m in FY2026; margin 28.9%
Net borrowings	US$20,482m at 30 Jun 2026 (30 Jun 2025: US$21,854m)
Leverage	3.1x adjusted net debt to adjusted EBITDA at 30 Jun 2026 (FY2025: 3.4x); target 2.5–3.0x
Return on invested capital	13.4% in FY2026
Dividend per share	50.0 US cents for FY2026 (20c interim, 30c final paid 3 Dec 2026); policy of 30–50% payout with a 50c floor
Short interest (% of float)	London line: 4.06% of issued shares, the aggregated net short position published by the FCA (14 Oct 2026). NYSE ADS (DEO): 3.09m shares short, about 0.56% of public float (MarketBeat, settlement 15 Sep 2026).
Days to cover	About 3.1 days for the NYSE ADS (MarketBeat, 15 Sep 2026); not published for the London line

7. What Are They Building

A leaner operating model. Sir Dave Lewis has set three priorities: relevant brands with clear category strategies, a sharper focus on customers, and a more agile operating framework. The new framework targets about US$850m of savings over FY27–28 plus about US$150m from supply chain, at a restructuring cost of about US$1.2bn, of which about US$752m was booked in FY2026. Press reports in August 2026 said the workforce had fallen by nearly 2,000.

More Guinness. Diageo is accelerating investment behind Guinness, its fastest-growing major brand, and FY2026 capital spending included added brewing capacity.

A smaller portfolio. Since July 2025 Diageo has sold Seychelles Breweries, Guinness Ghana Breweries, its Italian bottling plant and the Sheridan's liqueur brand, agreed to sell Diageo Kenya to Asahi (expected to complete by 31 Dec 2026, subject to approvals) and agreed, through United Spirits, to sell the Royal Challengers Bengaluru cricket team (expected to complete in FY27). Cîroc is now held in a joint structure with Main Street Advisors.

New regional structure. From FY27 India and EMEA are reported separately, giving a clearer view of the fast-growing Indian business, which had FY2026 restated net sales of US$1,418m.

8. Competitive Landscape

Diageo competes with the other global spirits groups and, through Guinness, with the big brewers.

Peer	Market cap (Oct 2026)	Key 2025 metric
AB InBev (ABI)	About $166bn (companiesmarketcap.com, Oct 2026)	Q2 2026 revenue $16,660m, organic growth 5.6% (AB InBev results, 29 Jul 2026)
Heineken (HEIA)	About $48bn (companiesmarketcap.com, Oct 2026)	H1 2026 organic net revenue growth 2.7% (Heineken half-year results, 5 Aug 2026)
Constellation Brands (STZ)	About $21.5bn (companiesmarketcap.com, Oct 2026)	Q2 FY27 net sales $2,633m, up 6.1% (Constellation results, 6 Oct 2026)
Pernod Ricard (RI)	About $19.1bn (companiesmarketcap.com, Oct 2026)	Q1 FY27 sales €2,234m, organic −0.9% (Pernod Ricard, 15 Oct 2026)
Brown-Forman (BF.B)	About $13.8bn (companiesmarketcap.com, Oct 2026)	Q1 FY27 net sales $911m, organic −1% (Brown-Forman, 2 Sep 2026)
Campari (CPR)	About $9.0bn (companiesmarketcap.com, Oct 2026)	H1 2026 organic net sales growth 2.7% (Campari results, 29 Jul 2026)

Diageo's FY2026 organic net sales decline of 2.0% was weaker than the brewers and Campari but similar to Pernod Ricard and Brown-Forman, which also face soft US spirits demand.

9. Leadership and Insider Activity

Sir Dave Lewis has been Chief Executive Officer (CEO) since 1 January 2026. Nik Jhangiani is Chief Financial Officer; on 23 Sep 2026 Diageo said Joanne Wilson, currently CFO of WPP, will succeed him in 2027. Sir John Manzoni is Chair. Director and PDMR (persons discharging managerial responsibilities) dealings disclosed by RNS in 2026 include:

Name	Date	Type	Shares	Plan Type
Sir John Manzoni (Chair)	12 Oct 2026	Purchase	400	Monthly purchase arrangement (also monthly from January 2026)
Sir Dave Lewis (CEO)	14 Sep 2026	Award	10,932	Deferred Bonus Share Plan
Nik Jhangiani (CFO)	14 Sep 2026	Award	13,430	Deferred Bonus Share Plan
Dayalan Nayager (Executive Committee)	14 Sep 2026	Award	138,285	LTIP grant (restricted share units)
John Rishton (Non-Executive Director)	18 May 2026	Purchase	3,274	Open-market purchase
Sir Dave Lewis (CEO)	16 Mar 2026	Award	306,039 conditional shares plus 306,039 options	2023 LTIP grant, vesting 8 Sep 2028
Nik Jhangiani (CFO)	09 Mar 2026	Vesting and sale	101,142 released; 47,657 sold	Special Recruitment Award; sale to cover tax

Executive Committee members also received LTIP and Exceptional Stock Award releases on 3–4 Sep 2026, selling part to cover tax. Open-market buying in 2026 has come from the Chair and non-executive directors; no open-market purchase by the CEO was found.

10. Key Risks

• US demand and tequila (Commercial): North America is 37% of net sales and fell 8.4% organically in FY2026; a longer slump in US spirits or tequila would hold back group growth.
• Tariffs and trade (Geopolitical): US tariffs on imported spirits, including Scotch, Irish whiskey and Mexican tequila, have weighed on gross margin; Diageo merged geopolitical, trade and regulatory risks into one principal risk in FY2026.
• Leverage (Financial): net borrowings of US$20.5bn and leverage of 3.1 times are above target; a delay to the Kenya or Bengaluru disposals, or weaker cash flow, would slow debt reduction.
• Restructuring execution (Operational): about US$1.2bn of restructuring and the new operating model must deliver about US$1bn of savings without disrupting sales; Diageo lists its operating model as a new principal risk.
• Changing drinking habits (Consumer): moderation, lower-alcohol and THC products, at-home drinking and GLP-1 weight-loss drugs may reduce alcohol demand, as flagged in the Form 20-F.
• Emerging markets and currency (Macro): high inflation and currency swings in markets such as Türkiye (US$786m impairment) and parts of Africa and Latin America can reduce reported profit.

11. Recent Developments

• 06 Aug 2026 — FY2026 results. Net sales US$19,643m, organic −2.0%; operating profit before exceptionals up 2.0% organic; US$2,527m exceptional charges; free cash flow up US$463m to US$3,211m; final dividend 30c.
• 06 Aug 2026 — Capital Markets Day. Sir Dave Lewis set FY27 guidance of broadly flat organic net sales and FY27–29 targets including about US$8bn of cumulative free cash flow.
• 18 Aug 2026 — Annual Report and board appointment. Diageo published its Annual Report and Form 20-F and appointed R. Alexandra Keith, former CEO of P&G Beauty, as a non-executive director from 5 Nov 2026.
• 19 Aug 2026 — Headcount reduction reported. Press reports said the workforce fell by nearly 2,000 during the restructuring, from about 29,860 average employees in FY2025.
• 23 Sep 2026 — New CFO named. Joanne Wilson, CFO of WPP, will succeed Nik Jhangiani in 2027.
• 13 Oct 2026 — New regional reporting. Diageo restated FY2026 net sales into five new regions, with India reported separately, ahead of Q1 FY27 results.

12. Key Dates to Watch

• 05 Nov 2026 — Q1 FY27 trading statement and Annual General Meeting
• 19 Nov 2026 — sterling equivalent of the 30c final dividend announced
• 03 Dec 2026 — final dividend of 30 US cents paid (record date 16 Oct 2026)
• Expected Dec 2026 — completion of the Diageo Kenya sale to Asahi (by 31 Dec 2026, subject to regulatory approval)
• Expected Feb 2027 — H1 FY27 interim results (date not yet published)
• Expected May 2027 — Q3 FY27 trading statement
• Expected Aug 2027 — FY27 preliminary results

Consumer-spending and inflation releases that move drinks shares are on the ChartsView Economic Calendar. Discuss Diageo with other investors in the ChartsView Forum.

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