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Diageo reported a 27.2% fall in operating profit for the year ended 30 June 2026 as restructuring and impairment charges outweighed a 2.0% increase in the company's organic operating-profit measure.

Reported net sales fell 3.0% to $19.643 billion from $20.245 billion. Organic net sales declined 2.0%, comprising a 0.4% volume decline and 1.6 percentage points of unfavourable price/mix.

FY26 results at a glance

  • Reported net sales: $19.643 billion, down 3.0% from $20.245 billion.
  • Reported operating profit: $3.156 billion, down 27.2% from $4.335 billion. The reported operating margin was 16.1%, down 535 basis points from 21.4%.
  • Operating profit before exceptional items: $5.683 billion, down 0.4% on a reported basis but up 2.0% organically. Diageo said the associated organic margin movement was an increase of 116 basis points.
  • Net profit: $1.958 billion, down 22.9% from $2.538 billion.
  • Basic earnings per share: 78.1 cents, down 26.3% from 105.9 cents. Basic EPS before exceptional items was 165.3 cents, up 0.7% from 164.2 cents.
  • Free cash flow: $3.211 billion, an increase of $463 million.

Why reported and organic profit moved in opposite directions

The 27.2% reported decline and 2.0% organic increase measure different things. Diageo reported $2.527 billion of exceptional operating charges in FY26, compared with $1.369 billion a year earlier.

Those FY26 charges included $1.489 billion of impairments. Within that total, Diageo recorded a $786 million charge against its Türkiye cash-generating unit and a $287 million impairment of the Don Papa brand.

Restructuring charges were $908 million. About $752 million related to implementing Diageo's new operating framework, with about $156 million connected to supply-chain agility and the Accelerate programme. The company says the new framework is intended to deliver about $850 million of savings over two years, beginning in FY27.

Before exceptional items, operating profit was $5.683 billion against $5.704 billion in FY25, a reported decline of 0.4%. On Diageo's organic basis, operating profit increased 2.0%, mainly because lower marketing investment and overheads were partly offset by lower gross profit.

Cash flow improves and net debt falls

Net cash from operating activities increased by $95 million to $4.392 billion. Free cash flow rose by $463 million to $3.211 billion, helped by lower capital expenditure, maturing-stock investment and lower year-on-year tax payments. Net capital expenditure was $1.181 billion, down from $1.549 billion.

Net debt stood at $20.482 billion on 30 June 2026, compared with $21.854 billion a year earlier. Diageo reported net debt to adjusted EBITDA of 3.1 times.

The board recommended a 30-cent final dividend, subject to shareholder approval, taking the proposed full-year dividend to 50 cents per share. The comparable FY25 figures were 62.98 cents for the final dividend and 103.48 cents for the full year.

Three regions grow while two contract

Organic net sales increased in three of Diageo's five regions: Africa grew 13.3%, Latin America and Caribbean increased 7.7%, and Europe rose 3.4%. North America declined 8.4%, while Asia Pacific fell 6.3%.

Great Britain delivered 2.9% organic net sales growth, driven primarily by double-digit Guinness growth that more than offset softer spirits. Ireland grew 3.2%, with Diageo citing continued Guinness growth supported by pricing and market-share gains.

Beer and ready-to-drink outperform spirits

At category level, organic net sales declined 5% in spirits but increased 9% in beer and 15% in ready-to-drink products.

Among the key brands in Diageo's table, Guinness organic net sales increased 12%, Johnnie Walker rose 2% and Buchanan's grew 12%. Don Julio declined 14%, Crown Royal fell 15% and Casamigos dropped 25%.

Source and methodology: Every financial, regional, category and brand figure in this report was checked against Diageo's online FY26 preliminary-results release, the company's preliminary unaudited results document and its results presentation, all dated 6 August 2026. Reported figures and company-defined organic, pre-exceptional, free-cash-flow, adjusted EBITDA and other non-GAAP measures are kept separate. Unless otherwise stated, comparisons are with FY25. This article is financial reporting, not investment advice.