The turnaround of Guinness maker Diageo is now firmly in the hands of Sir Dave Lewis, who took the helm last year and he is set to outline his vision for the future this week. After a challenging 12 months for the FTSE 100 drinks giant, marked by a 15% tumble in stock price and profit warnings, investors are keenly awaiting Lewis’s strategy.
The recent dip in Diageo’s performance culminated in a November forecast indicating operating profit growth in the low to mid-single digits for the year ending June 2026 – a downward revision from previous mid-single-digit guidance. This news triggered a 6% slide in shares, compounded by a projected $200 million (£153 million) hit from President Trump’s US tariffs. However, the appointment of Lewis in November 2025 appeared to inject renewed confidence, with Diageo’s shares subsequently gaining 15% year-to-date.
Analysts at AJ Bell noted the positive shift, stating, “Diageo’s shares are finally showing a little more spirit after a terrible run.” They cautioned, however, that it remains unclear whether this recovery is specific to the company or part of a broader trend among consumer staples.
Lewis arrives at Diageo with a reputation forged during successful turnarounds at Tesco and Unilever. At Tesco, where he served as chief executive from 2014 to 2020, he steered the supermarket chain back from the brink after a period of significant turmoil. Prior to his arrival, Tesco had suffered billions in value wiped off its shares following a failed growth strategy, accounting scandals, and increased competition from discounters like Aldi and Lidl. He halved Tesco’s debt pile by £22bn during his tenure.
His time at Unilever earned him the moniker ‘Drastic Dave’ due to a relentless focus on cost-cutting and rationalization. It’s anticipated that Lewis will bring a similar discipline to Diageo, though the focus will likely broaden beyond purely financial metrics to encompass a clear vision for the future.
Diageo’s portfolio includes globally recognized brands such as Guinness, Smirnoff, Johnnie Walker, and Captain Morgan. The company is scheduled to release its full-year results on Wednesday, with analysts predicting a 3% drop in sales and a 4% decrease in profit, resulting in a pre-tax income of $2.7 billion.
The challenges facing Diageo extend beyond macroeconomic factors. Changing consumer behavior, particularly a shift towards lower-alcohol and non-alcoholic beverages, is impacting demand for traditional spirits. Richard Hunter, head of markets at interactive investor, highlighted this uncertainty, questioning whether the younger consumer market represents a growth opportunity at all, while acknowledging the potential of the burgeoning “moderation” drink sector.
Lewis’s appointment follows the unexpected departure of Debra Crew in July 2025, after just two years as CEO. Crew’s tenure was marked by a profit warning stemming from misjudged sales trends in Latin America, a key market for Diageo. Her final year saw her remuneration increase to $4.8 million, according to the company’s annual report.
The coming weeks will be crucial as Lewis unveils his strategy for Diageo. Investors will be looking for a clear roadmap to address the current challenges and restore the company to a path of sustainable growth. The market will be watching closely to see if ‘Drastic Dave’ can once again deliver a dramatic turnaround, this time for one of the world’s leading spirits companies.
