Diageo (NYSE: DEO) holds guidance as North America stays weak

Posted by John Perry on Nov 5th, 2026

What happened

Diageo plc (NYSE: DEO) said first-quarter reported net sales rose 1.2% to $4.93 billion, while fiscal 27 guidance stayed unchanged.

Excluding EABL, organic net sales grew 0.6%, with volume down 0.1% and price/mix up 0.7%. Latin America and Caribbean and Asia Pacific delivered mid-single-digit growth, while India and Europe, Middle East and Africa were up low-single-digit.

North America declined mid-single-digit, and the company said the quarter was in line with expectations.

Key numbers

Metric	Latest	Change	Source
Q1 reported net sales	$4.93 billion	from $4.88 billion, +$56 million	SEC 6-K
Q1 North America net sales	$1.76 billion	from $1.83 billion, -$66 million	SEC 6-K
Fiscal 27 free cash flow guidance	c.$2 billion	from $3.2 billion, -$1.2 billion	SEC 6-K

Read more: Diageo (DEO) company research

Why it matters

The reported sales gain equals $56 million from a year earlier, a small lift rather than a broad acceleration in the business. That matters because the stock case still rests on pricing and mix doing enough work when volume is softer.

Diageo left fiscal 27 guidance unchanged, still calling for broadly flat organic net sales and low- to mid-single-digit organic operating profit growth. The plan includes c.$2 billion of free cash flow and c.$1.25 billion of capital expenditure after c.$850 million of exceptional costs tied to operating framework changes and the supply chain savings programme.

The release also said free cash flow excludes cash from EABL, so the target is meant to reflect the core business rather than that item. It also expects to end fiscal 27 around the mid-point of its 2.5-3.0x net debt/adjusted EBITDA target range if the EABL and Royal Challengers Bengaluru transactions close.

It said the outlook includes c.40% of the operating framework savings and c.25% of the supply chain savings, so some margin help is already built in. North America remains the biggest challenge, and the company still described the market as challenging, which keeps execution at the center of the case for investors.

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What's next

Sir Dave Lewis and Nik Jhangiani host a live presentation and Q&A at 9.30am UKT on Thursday, 5 November 2026. Any sign that North America is stabilizing or that the unchanged guide can improve would strengthen the case.