After turbulent times and a change in leadership, Diageo is now placing even greater emphasis on cost-cutting measures: instead of $500 million, the company now plans to save $625 million. However, new U.S. tariffs are adding extra pressure on profits and complicating business operations for the spirits manufacturer. British beverage giant Diageo, maker of Guinness, is tightening its cost controls even further following a difficult period and the departure of its CEO.

The company announced Tuesday in London, along with its annual figures, that the savings from its current program are now expected to reach $625 million (540 million euros), up from the previously targeted $500 million. At the same time, the new U.S. tariffs are projected to weigh down Diageo's profits by $200 million annually — $50 million more than initially expected.

In the most recent fiscal year ending in June, the group reported a 40 percent drop in profits to $2.5 billion due to special charges affecting brands like Johnnie Walker whisky, Smirnoff vodka, and Baileys Irish Cream. On a comparable basis and adjusting for currency effects, Diageo increased its sales by 1.7 percent to $20.2 billion. However, operating profit excluding one-time items fell nearly one percent to $5.7 billion.

Sales Growth Expected to Remain Steady in the New Fiscal Year For the new fiscal year ending in June 2026, interim CEO Nik Jhangiani is aiming for organic sales growth roughly in line with the previous year. He took over the role just days ago from former CEO Debra Crew.

Management acknowledged that the market remains challenging. Operating profit is now expected to grow organically by a mid-single-digit percentage, particularly in the second half of the fiscal year (January to June). This projection also takes into account the ongoing cost-saving program and includes the impact of the new tariffs.