DiageoDGEAF 71 Gross Margin % is 61.04% as of Dec. 2025, which is 1% above its 10-year median of 60.42. GuruFocus rates DGEAF with a GF Score™ of 71/100 and a GF Value™ of $31.99 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 205 Beverages - Alcoholic companies, Diageo ranks better than 80.98% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Diageo's Gross Profit for the
six
months ended in Dec. 2025 was $6,385 Mil. Diageo's Revenue for the
six
months ended in Dec. 2025 was $10,460 Mil. Therefore, Diageo's Gross Margin % for the quarter that ended in Dec. 2025 was 61.04%.
The historical rank and industry rank for Diageo's Gross Margin % or its related term are showing as below:
DGEAF'
s Gross Margin % Range Over the Past 10 Years
Min: 59.46 Med: 60.42 Max: 62.18
Current: 59.7
During the past 13 years, the highestGross Margin % of Diageo was 62.18%. The lowest was 59.46%. And the median was 60.42%.
DGEAF's Gross Margin % is ranked better than 80.98% of 205
companies
in the Beverages - Alcoholic industry
Industry Median: 42.29
vs DGEAF: 59.70
Diageo had a gross margin of 61.04% for the quarter that ended in Dec. 2025 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Diageo was -0.20% per year.
Diageo (OTCPK:DGEAF) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Diageo had a gross margin of 61.04% for the quarter that ended in Dec. 2025 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Diageo Gross Margin % Related Terms
Diageo Gross Margin % Historical Data
* Premium members only.
The historical data trend for Diageo's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Beverages - Wineries & Distilleries subindustry, Diageo's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Diageo Gross Margin % vs Beverages - Alcoholic Industry
For the Beverages - Alcoholic industry and Consumer Defensive sector, Diageo's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Diageo's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Diageo (DGEAF) has a Gross Margin % of 61.04% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Diageo and its competitors. This is near median its historical median of 60.42. Over the past decade, Diageo's Gross Margin % has ranged from 59.46 to 62.18. According to the industry distribution chart, Diageo ranks #39 out of 205 companies in the Beverages - Alcoholic industry, placing it in the top 19%.
Is Diageo's Gross Margin % too high?
Diageo's current Gross Margin % of 61.04% is near median its 10-year median of 60.42. Over the past 10 years, this metric has ranged from a low of 59.46 to a high of 62.18. The Beverages - Alcoholic industry median Gross Margin % is 42.29. Diageo's value of 61.04% is 44.3% above this industry median. Based on the distribution chart, Diageo ranks #39 out of 205 companies in the Beverages - Alcoholic industry, which is in the top quartile — a strong position relative to peers. Overall, Diageo has a GF Score™ of 71/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Diageo's Gross Margin % compare to BF.B?
According to the Beverages - Alcoholic industry distribution chart, Diageo ranks #39 out of 205 companies for Gross Margin %. This places Diageo in the top 19% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 42.29. Diageo's value of 61.04% is 44.3% above this benchmark. Historically, Diageo's own Gross Margin % has ranged from 59.46 to 62.18 over the past decade. While the company's 10-year median is 60.42 vs. the industry median of 42.29, Diageo has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Beverages - Alcoholic company?
The median Gross Margin % among Beverages - Alcoholic companies is 42.29, based on 205 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Diageo's current Gross Margin % of 61.04% is 44.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Diageo and its competitors. For the Beverages - Alcoholic industry, the median Gross Margin % is 42.29 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Diageo's current Gross Margin % is 61.04%, which is near median its own 10-year median of 60.42. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Diageo stock overvalued right now?
Based on GuruFocus' analysis, Diageo (DGEAF) is currently considered Significantly Undervalued. The stock's GF Value™ is $31.99, compared to a current price of $21.01 — trading 34.3% below its estimated fair value. The current Gross Margin % is 61.04%, which is near median its 10-year median of 60.42 and 44.3% above the Beverages - Alcoholic industry median of 42.29. Diageo's overall GF Score™ is 71/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Diageo (DGEAF), the current Gross Margin % is 61.04% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Diageo (DGEAF) Overvalued in 2026?
Based on GuruFocus' analysis, Diageo stock appears to be undervalued.
The current stock price of $21.01 is trading 34.3% below its estimated GF Value™ of $31.99.
GuruFocus considers Diageo to be Significantly Undervalued.
Key valuation signals for DGEAF:
Gross Margin %: 61.04% (near median its 10-year median of 60.42)
GF Value™: $31.99 vs. price of $21.01 (34.3% below fair value)
Industry Position: 44.3% above the Beverages - Alcoholic median (#39 of 205)
No single metric tells the full story. See the DGEAF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Formed in 1997 through the merger of Grand Metropolitan and Guinness, Diageo is the largest distiller globally by sales. Diageo acquired some of the Seagram assets in 2001, which gave it brands such as Captain Morgan rum and Crown Royal Canadian whisky. Since then, mergers and acquisitions have mostly been bolt-on in nature, plugging gaps in the company's product and geographic portfolio.
71GF Score
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