Diageo (DGE) H2 2026 earnings summary

Executive summary

• Strong momentum in Europe, Latin America & Caribbean, and Africa, with challenges in North America and Asia Pacific, especially in U.S. and Chinese spirits.

• Strategic focus on regaining competitiveness in the U.S. and implementing a new operating model progressed well.

• Free cash flow exceeded guidance, and leverage was reduced.

• Major restructuring program underway, with $1.2 billion in charges and $1 billion in expected savings to support future investment and competitiveness.

• Implemented new operating framework and delivered significant cost savings through the Accelerate program.

Financial highlights

• Organic net sales declined 2% year-over-year; excluding Chinese White Spirits, decline was approximately 0.5%.

• Organic operating profit increased 2% year-over-year; excluding Chinese White Spirits, growth was about 4.5%.

• Free cash flow reached $3,211m, up $463m from the prior year, supported by lower capex and maturing stock.

• Pre-exceptional EPS rose 0.7% to $1.653 (165.3 cents), aided by operating profit growth and FX.

• Full-year recommended dividend of $0.50 per share, with a payout policy of 30-50% and a minimum floor of $0.50 per annum.

Outlook and guidance

• Continued focus on investing in growth without reducing operating profit, leveraging savings from the new operating framework.

• Plans to share further strategic updates at the upcoming Capital Markets Day.