Diageo to Report FY25 Results: What Surprise Awaits Investors?

Diageo plc (DEO) is scheduled to release preliminary results for fiscal 2025 on Aug. 5. The alcoholic beverage company, which reports on a half-yearly basis, posted top and bottom-line declines and lower organic operating profit in the first half of fiscal 2025.

DEO is expected to register a decline in the bottom line when it reports fiscal 2025 numbers. The Zacks Consensus Estimate for quarterly earnings has moved up a couple of cents in the past 30 days to $6.75 per share.

The consensus estimate for earnings indicates a decline of 2.3% from the year-ago quarter’s reported number. The consensus estimate for Diageo’s quarterly revenues is pegged at $20.4 billion, which indicates a rise of 0.7% from the figure reported in the prior-year quarter.

Key Factors to Note

Diageo’s price-led strategy is a hallmark of its premiumization playbook, enabling it to deliver consistent revenue growth even in markets experiencing softer consumer demand. The company is refining its productivity program to drive efficiency across the business to bring sustainable growth. A key focus is balancing cost savings with strategic reinvestment, particularly in marketing and brand activation.

Diageo’s third-quarter fiscal 2025 results underscore its continued commitment to premiumization, reflected in strong organic net sales growth and a positive price/mix contribution. The company has leaned heavily into higher-end offerings across its core categories, particularly tequila, Guinness variants and strategic restocking of premium spirits in North America.

Diageo has been experiencing significant gains from improved price/mix, which have been aiding growth despite soft volume. In addition, this Zacks Rank #2 (Buy) company has introduced the first phase of its Accelerate program, which defines clear cash delivery goals as well as a controlled approach to operational excellence and cost efficiency.

However, the company's Asia-Pacific region has been witnessing softness due to downtrading and an unfavorable market mix, indicating that while its premiumization efforts are gaining ground, they remain sensitive to regional economic shifts and consumer affordability dynamics.

Diageo sees the near-term industry pressures to be highly macroeconomic-driven, with uncertainty hurting the timing and pace of recovery. On its last earnings call, management had reiterated organic net sales and operating profit views for fiscal 2025. In the second half of fiscal 2025, DEO continues to anticipate a sequential improvement in organic net sales growth compared with the first half. It still expects a slight drop in organic operating profit for the second half compared with the prior year, broadly in line with the decrease in the first half. This reflects the tariff impacts on results in fiscal 2025.

Stocks With the Favorable Combination

Here are a few companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Nomad Foods (NOMD) has an Earnings ESP of +1.15% and a Zacks Rank of 2 at present. NOMD is likely to register bottom-line decline when it releases second-quarter 2025 results. The consensus estimate for Nomad Foods’ quarterly earnings has risen a penny in the past seven days to 44 cents per share, implying a drop of 6.4% from the year-ago quarter’s number. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly revenues is pegged at $888.2 million, which implies a rise of 9.6% from the figure reported in the year-ago quarter. NOMD delivered an earnings surprise of 3.2%, on average, in the trailing four quarters.

The Estée Lauder Companies Inc. (EL) currently has an Earnings ESP of +36.11% and a Zacks Rank of 3. The company is likely to register declines in the top and bottom lines when it reports second-quarter 2025 numbers. The consensus mark for revenues is pegged at $3.4 billion, which indicates a decrease of 12.2% from the figure reported in the year-ago quarter. 

The Zacks Consensus Estimate for EL’s quarterly earnings per share of eight cents implies a sharp decline from 64 cents per share reported in the year-ago quarter. The consensus mark has gone up three cents in the past 30 days. EL has a trailing four-quarter earnings surprise of 107.4%, on average.

Monster Beverage (MNST) currently has an Earnings ESP of +0.37% and a Zacks Rank of 3. The company is expected to register growth in its top and bottom lines when it reports second-quarter 2025 results. The Zacks Consensus Estimate for MNST’s quarterly earnings has been stable in the last 30 days at 48 cents per share, indicating 17.1% growth from the year-ago quarter's number.

The consensus estimate for Monster Beverage’s quarterly revenues is pegged at $2.1 billion, implying a rise of 9.6% from the figure in the prior-year quarter. MNST reported a negative earnings surprise of 4.1%, on average, in the trailing four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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