Diageo Cancels 2026 Special Releases Amid Restructuring

Diageo reported a 1.4% rise in organic net sales for Q1, with North America down 3.6%. Reported net sales increased 1.2% to $4.931bn. The company maintained full-year guidance, expecting flat organic net sales growth and low to mid-single-digit organic operating profit growth for fiscal 2027.

The FTSE 100 reached a 3-month high, driven by a bank rally and a 5% surge in Diageo after strong revenue. UK banks like Barclays, Standard Chartered, Lloyds, and HSBC gained 1.5%-2.5% ahead of a BoE rate decision expected to raise rates to 4.00%. Lower oil prices also supported the index.

Workers at Diageo's Cameronbridge distillery are escalating strikes over proposed redundancies, according to Unite. The union warns of severe operational and safety impacts, with no whisky produced since late September. Diageo rejected cost-saving proposals, citing flexibility needs. Key brands include Johnnie Walker and Smirnoff.

Diageo won a class-action lawsuit in New York, where a judge dismissed claims that its Don Julio and Casamigos tequilas are not 100% agave. The court found the evidence insufficient, as it was based on a small study. Don Julio and Casamigos had U.S. retail sales of $2.7B and $1B, respectively, last year. Diageo confirmed its products' quality and integrity.

Diageo, a major whisky producer, is cutting production by over 50% due to oversupply concerns, particularly in Scotch, North American whiskey, and Tequila. The company's inventory, valued at $8.5bn, is seen as both an advantage and a challenge. Other producers like Ian Macleod Distillers and Brown Forman are also reducing output. Speculation-driven oversupply in American and Irish whiskey markets has contributed to the issue.

Joanne Wilson, WPP's CFO, will join Diageo as its next CFO, succeeding Nik Jhangiani. Wilson has led WPP's finances for under four years. Diageo is restructuring and has a $1 billion cost-reduction program.