Diageo has removed its medium-term guidance in its half-year update, after an "unfavourable foreign exchange" hit its net revenue and operating profit.

The owner of drinks brands including Guinness, Smirnoff and Johnnie Walker said its net sales dropped by 0.6% in its first half, reaching $10.9bn (£8.76bn). Despite this, its organic net sales increased by 1%.

Over the same period, Diageo's operating profit fell by 4.9%, which fell due to the "unfavourable foreign exchange".

Furthermore, its earnings per share dropped by 9.6% to 97.7 cents, as a result of a "significantly lower" Moët Hennessy contribution.

Chief executive at Diageo, Debra Crew, said: "Our fiscal 25 first half results marked a return to growth, delivering organic net sales growth of 1% despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures. Growth in four of our five regions was supported by market share gains.

"Notably, in North America, we outperformed the market with high quality share growth and positive organic net sales growth, driven by strong execution and momentum in Don Julio and Crown Royal. I'm also particularly proud of the performance of our iconic Guinness brand, which delivered double-digit growth for an eighth consecutive half, supported by brand building expertise, innovation and growing global momentum."

Despite this "return to growth", Diageo has removed its medium-term guidance, due to "current macroeconomic and geopolitical uncertainty" in many of its key markets, which has impacted its "pace of recovery".

It added that it still remains "confident of favourable industry fundamentals" and its "ability to outperform".

Diageo said that instead of this interim, it would "provide more regular near-term guidance".

Investment director at AJ Bell, Russ Mould, said the results had delivered “precious little good news”.

He concluded: "First the threat of having to include cancer warnings on its drinks labels emerged and now the company has withdrawn its medium-term guidance.

"It becomes one of the first companies to move beyond vaguely discussing the threat posed by US tariffs to actively talking about the impact and how it will attempt to mitigate it. Diageo imports from Mexico and Canada account for a good chunk of its US sales so it will be relieved to see the imposition of tariffs for these two countries delayed for now.

"If tariffs are eventually imposed then it will be a test of Diageo’s pricing power to pass on these extra costs to consumers. The financial results themselves weren’t outstanding, even though group revenue came in slightly ahead of forecasts. The outlier is Guinness which is having a good moment. This may only fuel speculation, so far dismissed by Diageo, about a spin-off or sale."

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