Tariffs would be a drag, but Guinness boss still needs to find a brew for recovery There’s no hiding from a 5% fall in operating profit at owner Diageo in the second half of 2024, Trump trade policy or not.
Diageo, the Guinness, Johnnie Walker and Smirnoff combo, was able to cite “the current macroeconomic and geopolitical uncertainty” – exhibit A being the possible US tariffs on Canada and Mexico – as it dropped its guidance for growth.
The negative, aside from the tariffs that Diageo can do nothing about, is that operating profit fell 5% in the half-year to $3.16bn (£2.53bn) despite the modest uptick in the sales line.
The company’s longstanding “medium-term” range of 5% to 7% for organic sales growth was achieved in 2022-23, but it has looked fanciful ever since the newish chief executive, Debra Crew, issued a thumping profits warning in November 2023.
Donald Trump’s on-off tariffs are at least good for one thing: they provide struggling managements with a handy excuse to ditch their sales forecasts.
