By Brian Swint
For makers of some of America's favorite drinks, the drama over President Donald Trump's plans to put tariffs on imported goods is far from over.
U.K.-based Diageo owns dozens of famous brands, including Don Julio and Casamigos tequila, both of which are made in Mexico. It produces Crown Royal whiskey, made in Canada. And it's responsible for Tanqueray gin and Johnnie Walker scotch, both produced in Scotland.
With the cloud of tariffs on all imports still hanging over the outlook, the company on Monday scrapped its financial guidance for the coming year. Previously, it had seen organic net sales growth between 5% and 7% and was looking forward to "building momentum" in 2025.
"We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause," said Debra Crew, chief executive of the group. "We will also continue to engage with the U.S. administration on the broader impact that this will have on everyone supporting the U.S. hospitality industry."
Diageo American depositary receipts (ADRs) were down 1.7% in premarket trading at $114.93 after retreating 2.5% on Monday.
They're not the only ones bracing for uncertainty. Constellation Brands, the makers of Modelo Especial beer, the label that overtook Bud Light as the most popular in the U.S., was downgraded by analysts at Piper Sandler on Monday to Neutral from Overweight. The company, which also makes Corona and Casa Noble tequila, lowered profit forecasts when it presented results last month. Constellation stock was little changed in the premarket after finishing 3.5% lower on Monday.
ADRs of Anheuser-Busch InBev, the maker of Budweiser, were also little changed in premarket trading.
Write to Brian Swint at brian.swint@barrons.com
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February 04, 2025 07:50 ET (12:50 GMT)
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