British alcohol giant Diageo (DEO) has announced that it is cutting its quarterly dividend payment by 80%, a move that has the company’s stock down 10%.
Going forward, the London-based company will pay its stockholders a quarterly distribution of $0.20 U.S. per share.
That’s down 80% from $1.03 U.S. paid to stockholders previously. Before the dividend cut, Diageo had boasted a dividend yield of 4.05%.
Management said they have been forced to dramatically cut the dividend as the company’s sales and profit outlook deteriorate.
Diageo is the world’s biggest spirits maker and owns top alcohol brands such as Johnnie Walker whisky, Guinness beer, Tanqueray gin, Smirnoff vodka, and Captain Morgan rum.
However, the company is struggling as younger generations consume less alcohol and demand weakens in the key markets of North America and China.
The dividend cut was announced alongside Diageo’s latest financial results.
The company reported that its net sales declined by 4% to $10.5 billion U.S. in the six months ended Dec. 31, 2025. Operating profit decreased 1.2% to $3.1 billion U.S.
Management at Diageo said they expect further weakness ahead, with sales projected to be 2% to 3% lower, and operating profit to be flat to up low single digits in 2026.
Before today (Feb. 25), DEO stock had declined 7% over the last 12 months to trade at $102.14 U.S. per share in New York.
