Diageo Considers Guinness Spin-Off Amid Sales Decline
Diageo (DEO) shares plunged over 6% following weaker-than-expected Q1 earnings, sparking speculation about a potential divestiture of its Guinness beer division. The spirits giant reported $4.9 billion in net sales for the July-September period, down from $5 billion year-over-year.
North American sales dropped 3.5% as US consumers showed unexpected caution, while Asia Pacific revenues collapsed 9.7%. China's WHITE spirits market proved particularly troublesome, with baijiu demand weakening significantly. Only Guinness and ready-to-drink products like Smirnoff Ice showed growth.
The sales slump reflects broader consumer belt-tightening and intensified competition, especially in the tequila category where Diageo reported double-digit declines. European markets provided limited relief with 5% growth, insufficient to offset losses elsewhere.
