Johnnie Walker maker Diageo's new CEO cuts annual forecasts and dividend as he strives for a big reset

Diageo's new boss Dave Lewis cut the company's annual forecast and dividend in his first results presentation on Wednesday, ‌sending its ⁠shares down ⁠6% and underscoring the scale of his task to turn around the world's biggest spirits maker.

The Johnnie Walker whisky and ​Guinness beer maker's financial update also weighed on the share prices of its peers. Pernod Ricard, Remy Cointreau and Campari fell ​by around 3% by 0830 GMT.

Dave Lewis, who took over as CEO in January, needs to reduce debt and revive growth, while managing tariff-related uncertainty in the U.S., slowing demand in China, ​fragile global consumer sentiment, and evolving drinking preferences among some consumers.


"There are ⁠a number ‌of things impacting our category. By far and away, the strongest is ​those pressurised consumer ​wallets," he said in an earnings presentation.

He said the rise of weight loss ⁠drugs, which research indicates can reduce the desire for alcohol, changing ​lifestyles and alternatives, such as legal cannabis, also had an impact, but that ​this was small for now.

Diageo now expects 2026 organic sales to fall 2%-3% and operating profit to be flat to up low-single-digits after volumes declined in four of its five regions in the first half, it said. It had earlier forecast flat to slightly lower sales and low-to-mid-single-digit profit growth.

The company declared an interim dividend of 20 cents per share, down from 40.5 cents a year ‌ago, and set a minimum floor for dividend of 50 cents per annum.

TOUGH START FOR 'DRASTIC DAVE'

Investors are focused on how Lewis, nicknamed "Drastic Dave" for his history of ​cost-cutting reforms ​at Tesco and Unilever, will implement ⁠his turnaround strategy and are keen for clarity on his plans. Diageo cut some jobs in the first half, and Lewis said he plans to present an updated strategy to the board in the ​second quarter and share it publicly in the third. The maker of Smirnoff Vodka and Captain Morgan rum has already launched a plan to sell assets and cut costs.

The company's U.S. sales declined 9.3% in the first half. Sales of tequilas such as Don Julio, which has been an important driver of growth, tipped more than 23% lower.