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World: Diageo removes sales forecast blaming Trump tariffs uncertainty
Drinks giant Diageo DEO failed to provide a future sales forecast on February 4, because of uncertainty around President Trump’s tariffs twists. The news sent DEO stock down over 1% in pre-market trading, TipRanks.com reported.
The Guinness and Johnnie Walker maker said, when reporting its half-year results to 31 December 2024, that it was removing medium term guidance due to current economic and geopolitical uncertainty in many of its key markets “impacting the pace of recovery”. That referred to both volatile consumer demand in countries such as the U.S. and UK but also growing uncertainty about U.S. tariffs strategy.
Indeed, Diageo, led by chief executive Debra Crew, said it has been talking with the U.S. government about the impact tariffs on countries, including Canada and Mexico, could have on its sales particularly its Canadian whisky brands and tequila. It warned that Trump’s threat to impose tariffs and then the subsequent delay made it even harder to predict future trading.
“If tariffs are eventually imposed then it will be a test of Diageo’s pricing power to pass on these extra costs to consumers,” said Russ Mould, investment director at AJ Bell.
The group said net sales during its first half dropped by 0.6% to $10.9 billion with operating profit down 4.9%. Sales in North America did well outperforming the market driven by demand for Don Julio and Crown Royal. It also noted a soaring thirst for Guinness despite a supply shortage in recent months. Analysts said however that this may only fuel speculation about a spin-off or sale of Guinness.
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