The maker of Johnnie Walker whisky and Tanqueray gin has struggled to restore investor confidence after a build up of unsold inventory in Mexico and Brazil caught the company by surprise in November.
Sales in the region fell 21.1% over the year to June 30 - a slightly deeper decline than Diageo anticipated - dragging its group sales and profit just below analyst expectations, down 0.6% and 4.8% respectively.
Chief Executive Debra Crew said Diageo had taken steps to resolve problems in the region and beyond, which she was confident would ultimately restore growth.
However, she warned that factors that had hurt Diageo's performance, including low consumer confidence, could persist into next year, making it difficult to say when the company could return to its medium-term goal of annual sales growth of between 5% and 7% per year.
"It's really hard to call...What we are doing is controlling what we can," she said.
RBC Capital analyst James Edwardes Jones said this was "not reassuring" given comments from other consumer companies, which have warned US consumer confidence is under pressure.
"We expected these results to be grim, and so they were," he said.
Some analysts and investors have called Diageo's medium-term sales guidance too ambitious.
Like peers such as Remy Cointreau (RCOP.PA), the company has endured a dramatic reversal of a post-pandemic sales boom, leaving it with too much stock gathering dust in many markets as consumers rein in spending on expensive alcohol.
In North America the company's sales fell 3%. It has been under pressure from investors to turn around market share losses in the United States, its biggest market.
Crew said Diageo has largely normalised its U.S. stock levels, but consumers remain cautious.
The company's shares fell to their lowest since 2020 in early trade, and were 9.6% lower at 0832 GMT.
