Research Alert: Diageo Q3 Beats On Sequential Recovery; Emerging Markets Offset U.s. Weakness

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Diageo reported Q3 FY 26 (Jun.) net sales of USD4.48B, beating consensus of USD4.27B. Organic net sales growth recovered to 0.3% in Q3 (1H FY 26: -2.8%), above the consensus estimate of a 2.3% decline. We believe the quarter demonstrated geographic diversification benefits, with strong growth in Europe (+8.8%), Latin America (+16.2%), and Africa (+17.1%) offsetting North America (-9.4%) and Asia-Pacific (-0.8%) headwinds. FY 26 guidance remains unchanged, with management anticipating a 2-3% organic net sales decline and flat-to-low-single-digit organic operating profit growth. U.S. spirits faced a 15.4% organic decline, largely due to destocking rather than underlying demand weakness, in our view. We acknowledge Easter timing and FIFA World Cup advance sales provided some benefit, though we also see signs of underlying improvement. CEO Lewis emphasized that actions are underway to address North America competitiveness, with a strategy update planned for August 2026.