In its fiscal 26 preliminary results, Diageo has revealed a 27.2% decline in operating profit and a 3% decline in net sales as the world’s largest spirits group continues to struggle in North American and Asia Pacific markets.

The group did, however, show growth in Europe, Latin America, the Caribbean and Africa.

In response to the performance, chief executive Dave Lewis outlined a restructuring programme that is expected to save the company around $1 billion over the next three years.

According to the group, the operating framework redesign is expected to deliver around $850 million of savings by fiscal 28, with an additional $150 million in savings from supply chain initiatives.

Speaking on the results, Lewis said: “We are pleased with our progress in LAC, Europe and Africa. We are focused on recovering our competitiveness in NAM and we are working through the consequences of Government policy in Chinese white spirits.

“The revised operating framework is being rolled out across Diageo, and the changes are significant. In 2026 this change incurs a cost of $0.8 billion with savings realised over 2 years starting in fiscal 27. These savings will allow us to invest in the turnaround without needing to reduce operating profit.”

The US continues to be a point of friction for Diageo with net spirits sales falling by 11.5%. Tequila, a category that has been a source of regional growth, saw marked declines of 21.1%, “driven by both Don Julio and Casamigos, reflecting a softer category, increased competitive intensity, and tough comparatives in the prior period, and both brands lost share.”

Declines were more dramatic in Greater China, where net sales fell by 34.9%, largely driven by declines in sales of baijiu.

The declines were partially offset by a strong performance in India where net sales grew by 7.1% thanks to a strong Scotch performance.

In Europe, a strong Guinness performance in the UK and Ireland offset a softer spirits showing.