Bulleit bourbon’s corporate parent, Diageo, reported that overall sales were down 2.8% and cut its dividend in half. The global spirits giant also is eyeing price repositioning for some brands as the U.S. consumers experience economic pressure.
Associated Press
Shares of several Kentucky bourbon companies fell on Wall Street after Diageo cut its dividend in half and indicated potential price cuts on some products.
Diageo, the parent of Bulleit bourbon, said overall sales for the first half of the year were down 2.8%, driven by a soft U.S. market. The company also cut its sales projections, saying that sales are now expected to be down 2 to 3% for the full year.
That sent shares of the global spirits giant — which also includes Johnnie Walker Scotch, Guinness stout, Smirnoff vodka, Tanqueray gin, Baileys liqueur, Captain Morgan rum and Don Julio & Casamigos tequila — plummeting, down more than 15% by mid-morning on Wednesday.
The news also pulled down the entire sector, with shares of Louisville-based Brown-Forman — parent of Jack Daniel’s Tennessee Whiskey, Woodford Reserve and Old Forester bourbons — falling more than 8%. Brown-Forman will release its third quarter financial results on March 4.
Diageo’s new CEO, Dave Lewis, said in prepared remarks ahead of a call with stock analysts that “the North American market is challenged.”
Tequila sales in the U.S. were especially soft, where overall net sales were down 6.8%, according to the company, with gains in the ready-to-drink segment not enough to overcome the losses of Don Julio, Casamigos and Crown Royal.
The company did report specific sales figures for its bourbon portfolio this time. Last August, Diageo reported Bulleit sales fell 7.3%; the company also closed the bottling facility at its Stitzel-Weller Distillery in Shively outside of Louisville last year and paused distilling at its plant in Lebanon for five months in 2025.
The company is in the midst of $625 million in cuts globally.
Diageo opened a Bulleit distillery in Shelbyville in 2017. Jonathan Palmer
Americans drinking less per occasion
Looking at the spirits market overall, Lewis said that consumers are drinking more often but having fewer drinks each time.
“These fewer serves per occasion point to a pressure in the economics that our consumer groups are facing,” Lewis said. “So whilst they do not diminish at all factors like GLP-1 or the attitudes towards the category, at this moment in time, they show a very small impact on spirits consumption, but there is a challenge, which is broader economically.”
Rising prices of consumer goods have meant “a very significant squeeze for U.S. consumers,” as well as in the United Kingdom, he said.
“We need to recognize that the discretionary spending power of consumers in key markets is under some pressure,” Lewis said.
Diageo’s portfolio is currently positioned in more premium territory, while many consumers are looking to trade down, such as to smaller pack sizes, he said.
“As a consequence, in the mass market part of the portfolio, we are significantly underrepresented,” he said.
Diageo hints at price cuts
Moving forward, Diageo’s immediate top priority is to “explore new portfolio opportunities that might involve some price repositioning, and it might open up new proposition spaces,” Lewis said.
He shared a strategy that has worked in the United Arab Emirates market of moving some brands to a lower price point, where they picked up enough steam to grow overall sales, while introducing new premium offerings including Bulleit and Johnnie Walker Black Ruby at top tier prices.
“I find Diageo to be a very strong business with an enviable position and lots of energy. The market provides significant opportunity, but we have some significant work to do,” Lewis said. “We’ll start by focusing on the portfolio and the category strategies, our customer relationships and our operating model.”
Jim Beam, Maker’s Mark parent Suntory down
Diageo’s news comes as other major spirits, beer and wine companies report continued downturns.
On Feb. 12, Jim Beam and Maker’s Mark parent Suntory reported alcohol sales were down 2.4% for the first half of the year. The company said that Jim Beam and Maker’s Mark outperformed the American whiskey sector, but did not release any specific figures.
In December, the company announced it would pause Jim Beam production at the main plant in Clermont for a year but did not say how much distilling would be cut.
Sales of American whiskey as a whole were down about 1%, or about $100 million, in 2025, according to the Distilled Spirits Council of the U.S.
MGP reports contract distilling cut in half
Another company, MGP Ingredients, also on Wednesday reported disappointing fourth quarter and full year results. MGP, which does contract distilling for other brands, reported that full-year brown goods sales declined by 52% as the company proactively renegotiated contracts and many large customers paused purchases, including to balance their whiskey inventories and manage their working capital.
During the fourth quarter, the company said it also recorded a $152.6 million non-cash adjustment to the carrying value of goodwill and indefinite-lived intangible assets in the Branded Spirits segment, primarily due to certain unfavorable macroeconomic factors such as a higher discount rate and lower peer valuation multiples compared to the fourth quarter of 2024. These charges resulted in a net loss of $134.6 million.
MGP owns Luxco, which has brands including Ezra Brooks, Rebel, Penelope Bourbon and Yellowstone. The company said that even though its premium brands had shown growth, sales of its Branded Spirits as a whole were down 3% for the year.
“From an industry standpoint, we believe that elevated inventory levels will continue to pressure our brown goods business in the near-term,” said president and CEO Julie Francis.
This story was originally published February 25, 2026 at 11:58 AM.
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