World’s biggest spirit maker Diageo falls 13% after slashing dividend, lowering profit outlook

European stocks were higher on Wednesday as global market nerves eased after U.S. President Donald Trump’s universal 10% tariff came into effect rather than the threatened higher 15% rate.

The pan-European Stoxx 600 was 0.6% higher at 2:35 p.m. in London (9:35 a.m. ET), with most major bourses and sectors in positive territory.

It’s another busy day of earnings on Wednesday with Leonardo, Iberdrola, E.ON, Bayer, Ferrovial, Heidelberg Materials, Poste Italiane, Fresenius, Novonesis and Telefonica. Data releases include German GDP and consumer confidence and the latest euro zone inflation figures.

British spirits company Diageo was down 13.6% in afternoon trade after lowering its 2026 sales and profit outlook on Wednesday. The world’s biggest spirits maker reported that weaker demand from North America and China had impacted earnings in its fiscal first quarter.

Net sales declined by 4% to $10.5 billion in the six months to December, as the company cited “pressure on disposable income impacting US Spirits.” Operating profit was also 1.2% lower at $3.1 billion.

Diageo is now expecting further weakness in 2026, with organic sales projected to be 2 to 3% lower, organic operating profit to be flat to up low single digits, and cut dividends to 20 cents per share.

Additionally, British carmaker Aston Martin will slash 20% of its workforce in 2026 after reporting weaker earnings due to the impact of tariffs in the U.S. and China, it said Wednesday.

The company said the cuts would amount to £40 million in savings. The luxury automaker’s revenue dropped to £1.26 billion in 2025, down 21% from the prior year. It posted an operating loss of £259.2 million, and total wholesale volumes declined 10% to 5,448.

Heightened tariffs in the U.S. and China weighed on the company’s performance and ability to execute its plans effectively, said Aston Martin’s CEO Adrian Hallmark. The stock was last down 2.1%.