Diageo Reports Sharp Drop in U.S. Spirits Sales

Diageo reported a 15.4% decline in spirits sales in the United States during the third quarter of its fiscal year, underscoring a softer market in the company’s largest region as weaker demand and sharper competition continued to pressure results.

The British drinks maker said on Thursday that U.S. spirits sales fell in the three months ended March 31, even as total group net sales reached $4.48 billion, up 0.3% on an organic basis from a year earlier and 2.3% on a reported basis. Total sales volumes rose 0.4% in the quarter.

The company said trading conditions in North America remained difficult. Dave Lewis, Diageo’s chief executive, said the portfolio in the region needed to become more competitive as the company works to improve performance in a market that accounts for 38% of group net sales.

Diageo’s North America business generated organic net sales of $1.71 billion in the quarter, down 9.4% from the same period in 2025. Within that region, tequila sales in the United States fell by double digits, which the company linked to weaker category demand, stronger competition and tough comparisons with last year.

The company said distributor shipments in the United States received some support from stock purchases made ahead of the FIFA World Cup, which is scheduled for June.

The results point to a broader slowdown in one of the most important spirits markets for global beverage companies, where pricing power and volume growth have become harder to sustain as consumers pull back and rivals fight for shelf space.

Outside North America, Diageo reported mixed performance across its portfolio. In Asia-Pacific, organic net sales fell 0.8%, hurt by weaker consumer demand in Greater China and continued softness in Chinese white spirits. Sales of baijiu in China declined by double digits, while the company’s international premium spirits portfolio posted low single-digit growth helped by the timing of the Chinese New Year holiday.

India delivered high single-digit growth excluding Maharashtra, where higher excise taxes weighed on sales during the quarter.

Latin America and the Caribbean posted organic sales growth of 16.2%, supported by distributor purchases tied to football tournaments and Easter demand. Brazil recorded double-digit growth, while Mexico saw a high single-digit decline.

In Africa, organic sales rose 17.1%, with double-digit gains in Tanzania, Uganda and South Africa. Diageo said spirits sales there were driven by Kenya Cane and ready-to-drink products including Smirnoff Ice.

Europe posted organic sales growth of 8.8%, supported by Guinness sales in Great Britain and Ireland and stronger spirits demand across the Middle East, North Africa, Central and Eastern Europe and Türkiye.

Diageo kept its fiscal 2026 guidance unchanged, still expecting an organic sales decline of between 2% and 3%. The company also said its Accelerator cost-saving program remains on track to deliver $300 million in savings by the end of the financial year.