Diageo posts third quarter revenue growth despite regional challenges and tariff pressures

Diageo, one of the world’s leading producers of spirits, reported revenues of $4.376 billion for its third fiscal quarter, covering January to March 2025. This figure marks a 2.9% increase compared to the same period last year. The company also saw organic net sales rise by 5.9%, driven by a 2.8% growth in organic volume and a positive price/mix effect of 3.1%.

The performance varied across regions. In North America, sales climbed 5.9% to $1.903 billion, while Latin America and the Caribbean posted a notable 12.8% increase, reaching $378 million. However, sales in Europe fell by 1.3% to $898 million, Asia Pacific saw a slight decline of 0.2% to $803 million, and Africa experienced a 4.1% drop to $369 million.

For the first nine months of its fiscal year, from July 2024 to March 2025, Diageo’s revenues totaled $15.277 billion. This represents a modest increase of 0.4% in absolute terms and a 2.4% rise on an organic basis compared to the same period last year.

Debra Crew, Diageo’s Chief Executive Officer, commented on the results, stating that the company achieved solid organic net sales growth in the third quarter and remains on track to meet its forecast for sequential improvement in organic net sales performance during the second half of fiscal year 2025. Crew reaffirmed Diageo’s outlook for organic operating profit for the full fiscal year, taking into account current tariff impacts.

Crew attributed short-term industry pressures mainly to macroeconomic factors and ongoing uncertainty affecting both the pace and timing of recovery. She emphasized Diageo’s commitment to its strategic priorities and operational discipline, highlighting the launch of the first phase of its Accelerate program during this quarter. The program aims to deliver short-term cash targets and focus on operational excellence and profitability, with the goal of strengthening Diageo’s effectiveness, agility, and resilience.

Crew said that Accelerate will help ensure sustainable and consistent performance while maximizing shareholder returns even if current business conditions persist. She added that more details about Accelerate will be shared with Diageo’s annual results in August.

Regarding recent tariff changes, Diageo stated that if the current 10% tariff on imports from both the United Kingdom and Europe into the United States remains in place—and if imports from Mexico and Canada continue to be exempt under USMCA—the estimated absolute impact would be about $150 million annually. The company noted that tariffs between the US and China do not have a material effect on its business.

Diageo expects that existing measures will allow it to mitigate roughly half of this tariff impact on operating earnings before any price adjustments are made. The company plans to continue working on further mitigation strategies going forward and expressed confidence in its ability to manage international tariffs based on its long track record in this area.

The company’s results reflect both resilience in key markets like North America and Latin America as well as challenges in Europe, Asia Pacific, and Africa amid ongoing global economic uncertainty and shifting trade policies.