Diageo reports Q3 sales growth, launches accelerate programme to drive cost efficiency  

UK – Diageo, the global beverage leader and maker of Johnnie Walker, has reported a 2.9% increase in reported net sales for the third quarter of fiscal year 2025, reaching US$4.4 billion.  

The company attributed the growth to favourable phasing, primarily in North America and, to a lesser extent, Latin America and the Caribbean. 

Organic net sales rose by 5.9%, supported by a 2.8% increase in volume and a 3.1% positive price/mix. All regions recorded positive price/mix except Asia Pacific, where ongoing consumer downtrading and an adverse market mix weighed on results. 

Regional Performance Breakdown 

North America led the performance with a 6% rise in net sales, driven by robust shipment growth in U.S. Spirits. Organic net sales in the U.S. were up 7%, supported by a pull-forward of imports by distributors ahead of anticipated tariffs and tequila restocking due to continued strong consumer demand. 

In Asia Pacific, organic net sales grew 2%, aided by favourable comparatives from inventory reductions in the prior year across Southeast Asia and Greater China. Continued growth in India also contributed to the region’s performance. 

Africa delivered the strongest regional performance, with organic net sales increasing 10%. East Africa saw double-digit growth across all markets, particularly in Tanzania and Uganda. In South, West, and Central Africa (SWC), Ghana led the gains with significant growth in both volume and sales. 

Commenting on the results, Chief Executive Officer Debra Crew said, “In the third quarter we delivered strong organic net sales growth and are on track to deliver on our guidance of sequential improvement in organic net sales performance in the second half of fiscal 25.” 

Crew also introduced the company’s new operational strategy, the Accelerate programme, which aims to boost operational effectiveness, improve cost efficiency, and enhance agility.  

The programme sets near-term cash delivery targets to strengthen Diageo’s resilience and ensure sustainable shareholder returns, especially amid persistent global uncertainties. 

Tariff Impact and Outlook 

Diageo anticipates an unmitigated annualised impact of US$150 million if the current 10% U.S. tariff on UK and EU spirits persists, while Mexican and Canadian imports remain exempt under the USMCA.  

The company noted that tariffs related to China have minimal impact on its operations. 

Despite these challenges, Diageo expressed confidence in mitigating approximately half of the expected impact through existing measures, excluding any pricing actions.  

The Don Julio maker referenced its historical success in managing international tariff fluctuations as a key factor in navigating current trade tensions. 

Looking ahead, Diageo projects a slight decline in organic operating profit in the second half of fiscal 2025 compared to the same period last year, mirroring the decline recorded in the first half. 

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