Why did Diageo cut its dividend today?

Management reset cash returns to fund price support and urgent operational investment. The interim dividend fell to 20 US cents from 40.5 cents as guidance moved to organic sales of minus 2% to minus 3% and flat operating profit for FY26. The goal is to stabilise demand across the US, China, and the UK.

How much did DGE.L stock fall after the news?

Diageo shares fell about 13% today as investors reacted to the Diageo dividend cut and weaker FY26 outlook. The drop reflects lower near-term income, softer margins from price cuts, and uncertainty about how quickly volumes and premium mix can recover in key markets.

What are Guinness capacity constraints in London?

Management highlighted supply bottlenecks that limited Guinness availability in London. The plan is to invest quickly to add capacity, reduce stock-outs, and improve service to pubs and retailers. Better availability should protect share and support on-trade momentum once works are completed and logistics improve.

What should UK income investors do now?

Consider pacing entries and focus on execution updates. Watch for signs of stabilising volumes, fewer stock-outs, and better working capital. If organic sales trends improve from the current guide and margins hold, the payout could rebuild over time. Until then, expect lower income and higher near-term volatility.

Global Market Insights

DGE.L Stock Today: Dividend Halved, Shares Plunge 13% – February 25

ByHuzaifa Zahoor February 26, 2026

The Diageo dividend cut is front and centre for UK investors today. DGE.L fell about 13% after new CEO Dave Lewis halved the interim payout to 20 US cents from 40.5 cents and reset guidance. Management guided to FY26 organic sales of minus 2% to minus 3% and flat operating profit. The move aims to stabilise demand with price cuts and faster investment, including fixing Guinness capacity constraints in London. It pressures near-term margins and cash returns but targets a healthier base across the US, China, and the UK.