London, May 18, 2026, 15:10 (BST)
- Diageo shares rose roughly 1.5% in London trading, outpacing the FTSE 100, which was also higher.
- A Diageo non-exec picked up 3,274 shares at £15.27 apiece, according to an RNS filing.
- Investors remain fixated on sluggish North American spirits sales and are waiting for CEO Dave Lewis’s strategy update set for August.
Diageo shares climbed in London on Monday, with the stock adding to a hard-fought rally for the Guinness and Johnnie Walker maker as a director bought shares and U.S. spirits demand stayed soft.
Shares were at 1,553 pence, up 1.54% as of 3:08 p.m. in London. The FTSE 100 edged higher. But the stock is still trading roughly 30% under its 52-week peak of 2,215 pence, with management still under pressure to prove the gains aren’t just a short-term move.
Diageo said Monday that non-executive director John Rishton bought 3,274 ordinary shares at £15.27 each on the London Stock Exchange. Some investors look at director share buys as a signal of confidence, but the company’s trading outlook was unchanged.
North America remains the biggest problem. Diageo said on May 6 its third-quarter reported net sales rose 2.3% to $4.5 billion, with organic net sales up just 0.3%. That was better than forecasts for a drop, but organic sales in North America slid by high single digits as U.S. spirits stayed weak.
North America remains Diageo’s “biggest challenge,” Chief Executive Dave Lewis said, according to Reuters after the trading update. He told investors the company has done “fundamental” work on its competitiveness and said, “We’ve been able to make interventions in parts of the group and see responses quite quickly.” But he also noted that turning around North America will take more time. Reuters
Some parts of the business did well. Diageo reported at least high-single-digit organic sales growth in Europe, Latin America and the Caribbean, and Africa. Guinness demand, the timing of Easter, and shipments made early before the FIFA World Cup lifted the results. Diageo left its fiscal 2026 outlook unchanged and said its Accelerate cost-saving plan is still expected to bring about $300 million in savings by year-end.
Diageo CFO Nik Jhangiani said the World Cup is a “critically important” event for the company, The Spirits Business reported. Jhangiani told investors it was “the first time a spirits producer is really supporting this” in reference to Diageo being an official spirits supporter of the tournament. The Spirits Business
The market hasn’t yet made a call on whether this will stick. Morningstar’s Verushka Shetty lowered her fair value estimate for Diageo to 1,840 pence from 2,140 pence after the latest update, pointing to weaker North America growth. She still called the stock undervalued. Shetty said moves on U.S. pricing and spending on ready-to-drink could take a while to spur a recovery.
Lewis is set to lay out more of his plan to investors in August. One holder was cautiously positive. Richard Scrope, manager of VT Tyndall Global Select, told Reuters, “It’s early days for Dave, but he does seem to be grasping it.” Reuters
Competitive pressure is a bit lower now. Earlier this month, Reuters said the merger talks between Pernod Ricard and Brown-Forman ended, so Diageo CEO Lewis no longer has to worry about a bigger competitor as he works to stabilize the company.
The risk isn’t gone. If U.S. shoppers keep trading down and tequila price cuts don’t spark a volume rebound, Diageo’s recent sales beat might not last. World Cup-driven stocking could also reverse after the matches. Higher oil and rising bond yields from Middle East tensions are stirring fresh inflation worries, which doesn’t help a drinks company facing household budget strains.
