Diageo plc
- Open
- 92.58
- Day high
- 92.73
- Day low
- 91.64
- Prev close
- 92.99
- Volume
- 507K
- Mkt cap
- $51.1B
- P/E (TTM)
- 12.5
- EPS (TTM)
- $7.36
- P/B
- 4.7
- P/S
- 1.3
- Yield
- 3.53%
- Per share
- $3.24
Diageo plc (DEO) is a Consumer Defensive company listed on NYSE. The stock is down 16% over the past year. Drillr has 1 published research article covering DEO.
Diageo plc (DEO) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 2 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
DEO earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 6, 2026 | $2.55 | $2.80 | +9.8% | $9.2B | +0.4% |
| Feb 25, 2026 | $3.67 | $3.80 | +3.5% | $10.5B | -0.6% |
| Dec 31, 2024 | $4.25 | $3.47 | -18.4% | $10.9B | +1.4% |
| Aug 3, 2023 | $3.35 | $3.06 | -8.7% | $9.4B | -6.0% |
| Dec 31, 2022 | $4.86 | $4.75 | -2.3% | $11.1B | -0.6% |
| Aug 4, 2022 | $2.72 | $2.23 | -18.0% | $7.5B | -9.2% |
| Dec 31, 2021 | $4.49 | $3.36 | -25.2% | $8.0B | -24.1% |
| Aug 3, 2021 | $2.59 | $1.84 | -29.0% | $5.9B | -26.1% |
| Jun 30, 2019 | — | $0.98 | — | $6.0B | — |
| Jun 30, 2018 | — | $0.78 | — | $5.6B | — |
| Dec 31, 2017 | — | $1.64 | — | $6.5B | — |
| Jun 30, 2017 | — | $0.91 | — | $5.6B | — |
Diageo plc company profile
Overview
Diageo plc (LSE:DGE) is a British multinational alcoholic beverages company headquartered in London, United Kingdom. Founded in 1997 through the merger of Guinness and Grand Metropolitan, Diageo traces its roots back to 1886 when Arthur Guinness & Son was incorporated. The company has evolved to become the world's largest spirits producer, owning an extensive portfolio of premium and luxury alcoholic beverage brands across multiple categories including whisky, vodka, gin, tequila, rum, and beer. Diageo operates globally with a presence in over 180 markets, serving both on-trade establishments like bars and restaurants as well as off-trade retail channels.
Business
Diageo operates in the global alcoholic beverages industry, specifically focusing on the production, marketing, and distribution of premium and luxury spirits, beer, and ready-to-drink products. The alcoholic beverage industry is characterized by brand heritage, consumer loyalty, and premiumization trends where consumers increasingly trade up to higher-quality, more expensive products. The company's business is organized around several key product categories: **Scotch Whisky** represents Diageo's heritage category, anchored by Johnnie Walker, the world's best-selling Scotch whisky brand. This category includes various expressions from blended Scotch to single malts, targeting different price points and consumer segments. Scotch whisky requires extensive aging, making it a capital-intensive business with long production cycles. **Tequila** has emerged as a significant growth driver, featuring premium brands like Don Julio and Casamigos. This category has experienced substantial growth, particularly among younger consumers and in the super-premium segment. Tequila production is concentrated in Mexico and requires blue agave, creating supply chain complexities. **Vodka** portfolio includes globally recognized brands such as Smirnoff, Cîroc, and Ketel One. Vodka appeals to a broad consumer base and serves as a versatile mixing spirit, making it popular in both on-premise and off-premise consumption. **Other Whiskeys** encompass American whiskeys like Crown Royal and Bulleit, Irish whiskeys, and other regional whiskey expressions. This category benefits from the global whiskey renaissance and premiumization trends. **Beer** is primarily represented by Guinness, the iconic Irish stout that has shown consistent double-digit growth. Guinness has successfully expanded beyond its traditional markets and appeals to diverse consumer demographics globally. **Gin, Rum, and Other Spirits** include brands like Tanqueray gin, Captain Morgan rum, and Baileys liqueur, each serving specific market segments and consumption occasions. Based on recent financial performance, Scotch whisky and North American whiskeys represent the largest revenue contributors, while tequila and beer (primarily Guinness) are the fastest-growing segments, each contributing approximately 15-20% of total revenues.
Revenue model
Diageo generates revenue primarily through the sale of alcoholic beverages to distributors, retailers, bars, restaurants, and other on-premise establishments. The company operates a three-tier distribution system in many markets, selling to distributors who then supply retailers and on-premise accounts. In some markets, Diageo sells directly to large retail chains or operates its own distribution networks. The business model centers on brand ownership and marketing rather than just manufacturing. Diageo invests heavily in brand building, marketing, and consumer engagement to maintain pricing power and market share. The company's brands command premium prices due to their heritage, quality perception, and marketing investments. **Revenue streams include:** 1. **Product sales** to distributors and retailers, representing the vast majority of revenues 2. **Licensing arrangements** where Diageo licenses its brands to local partners in certain markets 3. **Contract manufacturing** for third-party brands in some facilities **Key customers** include major distributors like Southern Glazer's Wine & Spirits in the US, large retail chains such as Costco and Walmart, and on-premise accounts including restaurant chains and independent bars. The customer base is highly fragmented, with no single customer representing more than 10% of total sales. **Factors that increase margins** include successful premiumization as consumers trade up to higher-priced products, operational efficiency improvements, favorable foreign exchange rates in key markets, and pricing power during inflationary periods. The company's scale advantages in procurement, manufacturing, and marketing also support margin expansion. **Factors that decrease margins** include input cost inflation for raw materials like agave, grains, and glass packaging, unfavorable currency movements, increased competition requiring higher marketing spend, regulatory changes such as tariffs or excise tax increases, and economic downturns that pressure consumer spending on discretionary items. Supply chain constraints, particularly for aged spirits, can also limit volume growth and margin optimization.
Competitive moat
Diageo possesses a strong economic moat built primarily on intangible assets and brand equity accumulated over decades or centuries. The company's moat consists of several key elements: **Brand Heritage and Consumer Loyalty** form the cornerstone of Diageo's competitive advantage. Brands like Johnnie Walker (established 1820), Guinness (1759), and Tanqueray (1830) have built deep emotional connections with consumers that are extremely difficult to replicate. These brands benefit from generational loyalty and cultural significance that transcends mere product attributes. **Scale and Distribution Advantages** provide significant competitive benefits. Diageo's size enables it to secure premium shelf space, negotiate favorable terms with distributors, and spread marketing costs across a large revenue base. The company's global distribution network and relationships with key trade partners create barriers for smaller competitors. **Regulatory and Production Barriers** protect certain categories, particularly aged spirits. Scotch whisky must be aged for a minimum of three years, with premium expressions requiring decades of maturation. This creates natural barriers to entry and makes rapid capacity expansion difficult for competitors. Geographic restrictions on production (e.g., tequila must be made in specific Mexican regions) further limit competitive threats. **Portfolio Diversification** across categories, price points, and geographies reduces risk and provides cross-selling opportunities. This breadth is difficult for focused competitors to match and provides resilience during category-specific downturns. **Potential competitive threats** include craft spirits producers gaining market share in premium segments, changing consumer preferences toward health-conscious alternatives, private label products in value segments, and well-funded competitors like Pernod Ricard or Brown-Forman. The rise of direct-to-consumer sales and changing distribution models could also challenge traditional advantages. However, the strength of Diageo's brand portfolio and scale advantages suggest the moat remains robust, though not impregnable.
Risks & safety
**Overall Assessment:** Diageo maintains a solid financial position with adequate liquidity and manageable debt levels, though valuation metrics suggest limited margin of safety at current prices. **Cash and Liquidity:** - Cash and short-term investments: $1.66 billion (Q2 FY2025) - Free cash flow: $1.69 billion (Q2 FY2025) - Operating cash flow: $2.32 billion (Q2 FY2025) - Current ratio: 1.60x indicating adequate short-term liquidity **Debt and Solvency:** - Debt-to-equity ratio: 2.20x (elevated but manageable for the industry) - Company maintains investment-grade credit rating - No immediate solvency concerns given strong cash generation - Management focused on deleveraging balance sheet **Valuation Metrics:** - P/E ratio: 9.1x (appears reasonable) - EV/EBITDA: 21.4x (elevated, suggesting limited upside) - Price-to-book: 6.88x (high, reflecting brand value premium) - Graham number suggests potential overvaluation at current levels **Other Considerations:** - Dividend yield provides some downside protection - Cyclical nature of consumer discretionary spending creates earnings volatility risk - Currency exposure from global operations adds complexity - Inventory-heavy business model ties up significant working capital
Recent development
Over the past few years, Diageo has undergone significant strategic evolution in response to changing market dynamics and consumer preferences. The company has intensified its focus on premiumization, particularly in the tequila category where brands like Don Julio and Casamigos have delivered exceptional growth, with tequila achieving 21% organic growth in the most recent half-year. **Geographic Strategy Shifts** have been notable, with Diageo addressing major inventory challenges in Latin America and the Caribbean while strengthening its position in North America through distribution network transformation. The company normalized inventory levels in LAC after significant destocking, while in North America, management focused on improving route-to-market capabilities and gaining market share in key categories. **Portfolio Optimization** has accelerated, with Diageo concentrating investment on its most promising brands while divesting non-core assets. The integration of Casamigos into Diageo's global distribution network exemplifies this approach, leveraging the company's scale to expand premium brands internationally. **Operational Excellence Initiatives** delivered $700 million in productivity savings in FY2024, demonstrating management's ability to drive efficiency improvements. The company has invested in technology for better inventory tracking and sales operations planning, addressing previous supply chain challenges. **ESG Strategy Simplification** marked a shift toward more focused sustainability initiatives, concentrating on decarbonization, responsible alcohol consumption, and water replenishment rather than broader ESG commitments. **Strategic Guidance Changes** reflect management's more cautious outlook, with the company removing its medium-term guidance of 5-7% organic net sales growth due to macroeconomic uncertainties and challenging consumer environments globally.
DEO company profile · for informational purposes only — not investment advice.
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