The Johnnie Walker owner saw net sales of US$10.5bn decline 4%, in the first results released under new chief executive Dave Lewis.

“Our performance in the first half of fiscal 26 was mixed. Strong performance in Europe, LAC and Africa, was offset by a weakening performance in NAM and continued weakness in Chinese white spirits in APAC. US spirits performance reflected pressure on disposable income, and competitive pressure from more affordable alternatives addressing a more stretched consumer wallet,” said Lewis.

Diageo also reported an organic operating profit decline of 2.8%, mainly due to an adverse market mix and tariff costs.

“Only several weeks in I can already see significant opportunities for Diageo to act more decisively to enhance its competitiveness and broaden the portfolio offering leading to higher growth,” added Lewis.

As the company refines its strategy to deliver stronger shareholder value, Lewis has noted the immediate priorities to: build competitive category strategies, winning with relevant brands, focus on the customer, and the redesign of the Diageo operating framework to drive sustainable returns.

“To deliver on these opportunities, we need to create more financial flexibility. Accordingly, the board has taken the difficult decision to reduce the dividend to a more appropriate level which will accelerate the strengthening of our balance sheet. We are confident that this is the right action which will ensure that Diageo can reinforce its position as the leading international spirits business and drive stronger shareholder value over the coming years,” Lewis continued.

The dividend to shareholders will be reduced by 30-50%.