Diageo is gearing up to reveal how Guinness and its major spirit brands fared during the crucial Christmas season, having dismissed rumours that it might offload the iconic Irish stout. The London-headquartered drinks giant is anticipated to report another stellar performance from Guinness, which has been a standout success in recent times, even clinching the title of the UK’s top-selling beer in pubs.

Investors are particularly eager to learn about the future direction for Guinness when Diageo presents its market update on Tuesday, February 4. This announcement will follow roughly a week after Diageo quashed speculation about selling Guinness or its 34% share in luxury champagne producer Moet Hennessy. Diageo made it clear that it had "no intention" of parting with either asset, despite suggestions it could rake in £8bn from a Guinness deal. Guinness has been a huge source of revenues for Diageo over the past few years. Last July, the company attributed robust sales of Guinness, especially in the UK, as a driving force behind an 18% surge in its overall beer sales.

The brand's soaring popularity has put a strain on production, with Diageo reporting "unprecedented levels" of demand from UK pubs leading up to the festive period. This intense demand led to reports of some pubs experiencing shortages and the brewer boosting its stockpile in Ireland to meet the thirsty market. Shareholders will be keen to find out whether Diageo managed to cash in on this high demand financially, or if supply constraints hindered the company's ability to fully capitalize on Guinness's sales potential during the holiday stretch.

Analysts are forecasting a modest rise in organic sales for the Diageo group, with an estimated increase of around 0.5% for the six months leading up to September. This growth is expected to be driven by beer sales, counterbalancing a slowdown in scotch and rum. The owner of Gordons gin and Baileys is also predicted to announce a 2% decrease in organic operating profits for the same period. All eyes will be on chief executive Debra Crew to steer the company back to success after shares plummeted to their lowest since 2017 last year.

Russ Mould, AJ Bell investment director, commented: "Disappointing results for the fiscal year to June 2024 and a profit warning for fiscal 2025, thanks in part to problems at the Latin American operation, have weighed heavily upon the share price, along with concerns over a wider slowdown in alcohol consumption. "Further complications include Chinese tariffs on European brandy, rhetoric over additional levies on European scotch sales into the USA, calls from the US surgeon general for warnings about the health impact of alcohol consumption and a cooling in the once-red-hot tequila market.".