Diageo reports strong revenue growth in multiple regions, expecting to mitigate impact of tariffs.

From Morningstar: 2025-05-20 05:18:00

Diageo reported a 2.9% increase in net sales year over year, with organic revenue growth at 5.9%, despite foreign exchange headwinds. North American sales increased 6%, while Asia-Pacific sales rose by 2%. Latin American sales grew by 29%, and African sales saw a healthy 10% growth.

The firm maintains a fair value estimate of £25.90, viewing the stock as undervalued. Diageo expects margin deterioration in fiscal 2025, but organic profit growth to exceed sales growth in fiscal 2026. The impact of tariffs is anticipated, but the firm is confident in mitigating its effects.

Diageo estimates a $150 million negative impact on profitability from the current 10% tariff on UK and European imports into the US, but believes it can mitigate about half of this impact before considering pricing actions. The firm has a history of successfully navigating trade wars and tariff hikes.



Read more at Morningstar: Diageo Trading Update: Strong Revenue Uplift Ahead…