Diageo has smashed expectations to grow revenues by 0.3% in the third quarter, despite continued difficulties in North America (NA).
By late April, market analysts had expected the spirits giant’s organic revenues to drop by 2.3% in the quarter, after a tough start to the financial year.
But massive growth in Africa, Latin America and the Caribbean (LAC) as well as Europe more than made up for weakness in the troubled North America and Asia Pacific markets.
Organic growth of 17.1% in Africa, 16.2% in LAC, and 8.8% in Europe acted to counter the 9.4% decline in NA and 0.8% fall in Asia Pacific. Guinness’ continued popularity in Great Britain & Ireland was named a key reason for European growth.
Globally, volumes were up 0.4% in the three months to 31 March 2026, compared to the third quarter of FY2025. Net sales in the quarter were up 2.3% to $4.5bn (£3.3bn) when including currency exchange and disposals.
“We are pleased with the strong growth across Europe, LAC and Africa. North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive,” said new Diageo CEO Dave Lewis.
“Actions are already underway to address this,” he said.
Lewis added that progress on the redesign of Diageo’s new strategy and the shaping of a “more competitive” operating framework were well underway. Diageo will unveil its new strategy with its full-year results in August.
Diageo maintained full-year guidance for organic sales to fall 2%-3%.
Lewis’ statement that the drinks giant was taking corrective action in the US was welcomed by analysts, with Barclays’ Laurence Whyatt calling the region Diageo’s “key drag”.
RBC analyst James Edwardes Jones added: “The US did no worse than feared in Q3, while Europe, Latam (helped by buy-in ahead of the Fifa World Cup) and Africa all did very well, both relative to expectations and in absolute terms.
“Given the importance of the US to Diageo, it would be flippant to argue that things are on the mend yet, but these results do, perhaps, give some credibility to CEO Dave Lewis’ comment on North America that ‘actions are already underway to address this’.”
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