What were Diageo's actual and expected organic net sales performance for the quarter ended March, and what key factors drove the surprise growth?

Diageo reported 0.3% growth in quarterly organic net sales — a significant positive surprise against analysts’ expectation of a 2.3% decline — driven primarily by strong demand for Guinness in Britain and Ireland and increased customer stocking in Latin America and the Caribbean ahead of the soccer World Cup. This growth was partially offset by a 9.4% organic sales decline in North America, its largest market, though that decline was less severe than forecasted.

How has new CEO Dave Lewis responded to Diageo’s challenges since taking over in January, and what is the company’s current fiscal 2026 outlook?

Since assuming the CEO role in January, Dave Lewis has taken swift action, including slashing Diageo’s sales forecast and halving its interim dividend in February, while warning that 2026 organic sales would fall by 2% to 3%. He acknowledged North America as the company’s ‘biggest challenge’ due to soft market conditions and insufficiently competitive offerings, stating that corrective actions are already underway. Diageo maintained its fiscal 2026 forecast despite ongoing concerns about the Middle East conflict’s impact on energy, supply, and distribution, and Lewis remains tasked with reducing debt and reviving growth amid broader industry headwinds including the cost-of-living crisis, rising use of weight-loss drugs, and shifting drinking preferences among younger consumers.