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Tequila sales in the US fell by double digits<\/p>\nCEO Dave Lewis said Diageo\u2019s North America offer \u201cneeds to be more competitive\u201d after the firm posted a 0.3% sales uptick in its third quarter (Q3).<\/p>\n
Tequila sales in the US fell by double digits<\/p>\n
For the three months ending 31 March 2026, the Johnnie Walker and Don Julio owner recorded net sales of US$4.48bn.\u00a0The figure marked a slight 0.3% organic rise on the same period from the previous year, and a 2.3% increase on a reported basis.<\/p>\n
Volumes were also up by 0.4% in the quarter.<\/p>\n
Commenting on the results, Diageo\u2019s chief executive officer (CEO) Dave Lewis labelled North America as the company\u2019s \u201cbiggest challenge\u201d.<\/p>\n
Calling the market conditions \u201csoft\u201d, he said \u201cour offer needs to be more competitive\u201d and that \u201cactions are already underway to address this\u201d.<\/p>\n
North America is Diageo\u2019s largest market, accounting for 38% of its net sales.<\/p>\n
Diageo\u2019s Q3 organic sales of US$1.71bn in the region were down by 9.4% compared with the same period in 2025.<\/p>\n
In the US specifically, spirits sales were down by 15.4%. Its\u00a0Tequila business suffered a double-digit decline due to \u2018tough prior year comparatives, competitive pressure and category softness\u2019.<\/p>\n
Diageo noted that Q3 shipments in the country were positively impacted by distributors stocking up ahead of the Fifa World Cup in June.<\/p>\n
In Asia-Pacific, which represents 18% of its net sales, Diageo\u2019s organic net sales suffered a small dip of 0.8%.<\/p>\n
The company said this was driven by weakness in Greater China and continued weakness in Chinese white spirits, which were in decline by double digits. Diageo is rumoured to be looking for buyers for its baijiu business<\/a>.<\/p>\n Diageo\u2019s international premium spirits managed low single-digit growth, supported by the Chinese New Year\u2019s later positioning in the calendar.<\/p>\n India, meanwhile, reported high single-digit growth excluding the Maharashtra state, which was impacted by an excise tax increase.<\/p>\n Other continents: strong growth<\/p>\n Lewis said Diageo was \u201cpleased with the strong growth\u201d across Europe, Latin America and the Caribbean (LAC) and Africa, with the latter regions growing by 16.2% and 17.1% respectively.<\/p>\n In LAC, the company benefited from the upcoming Fifa World Cup with distributor buy-in ahead of June\u2019s football tournament, as well as Easter being part of the quarter.<\/p>\n Brazil was singled out for double-digit net sales growth. On the contrary, Mexico suffered high single-digit decline.<\/p>\n Spirits saw double-digit growth led by Scotch, while Diageo\u2019s ready-to-drink (RTDs) segment in LAC also posted strong growth, driven by Smirnoff Ice in Brazil.<\/p>\n In Africa, Diageo\u2019s sales were lifted by double-digit growth in Tanzania, Uganda and South Africa.<\/p>\n Spirits in the region grew by double digits, led by Kenya Cane. Strong growth in RTDs was again led by Smirnoff Ice, this time in South Africa.<\/p>\n Diageo\u2019s European business also performed well, growing by 8.8%. Guinness led growth in Great Britain and Ireland, while spirits drove sales in the Middle East and North Africa (MENA), Central and Eastern Europe, and T\u00fcrkiye.<\/p>\n Diageo\u2019s spirits segment in Europe saw a high single-digit increase. Scotch was a strong point, led by Johnnie Walker in MENA and T\u00fcrkiye.<\/p>\n Overall, Diageo\u2019s organic sales guidance for its fiscal 2026 year remains unchanged from the readjustment in its H1 results<\/a>, with a forecasted drop of 2%-3%.<\/p>\n Diageo noted it is on track to save US$300m by the end of fiscal 2026 through its cost-cutting Accelerator programme<\/a>.<\/p>\n The sale of its Royal Challengers Bengaluru cricket business (completed in March 2026<\/a>) and shareholding in East African Breweries Limited<\/a> (EABL) will also trim costs.<\/p>\n Lewis added: \u201cProgress on the redesign of our new strategy and the shaping of a more competitive operating framework is well under way.<\/p>\n \u201cWhile we are mindful of continued geopolitical uncertainty, including the impact of the ongoing conflict in the Middle East on energy, supply and distribution, we are reiterating our fiscal 26 guidance.\u201d<\/p>\n Lewis, who assumed the CEO position from 1 January<\/a>, previously said the business would target the mass market<\/a> to curb falling sales.<\/p>\n Related news<\/p>\n \n \n ![\"Diageo\"](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/05\/Fifa-World-Cup-350x350.jpg\")
Diageo believes the upcoming Fifa World Cup is an opportunity to turn sales around<\/p>\n
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