London, June 18, 2026, 11:07 BST
- Diageo was steady at 1,506.5 pence at 11:05 BST. The stock moved in a range from 1,493 to 1,517.5 pence.
- CEO Dave Lewis told top executives to reduce staff numbers and slash department budgets. The company is likely to reveal how many jobs will go next week in an internal update.
- Diageo is set to report fiscal 2026 results and give a strategy update on Aug. 6. The group still expects organic net sales to drop 2%-3%, with the outlook stripping out currency changes and portfolio moves.
Diageo shares were flat on Thursday after a report said CEO Lewis gave his executive committee cost-cutting targets instead of a single company-wide jobs number. Diageo told Reuters the effort is tied to its operating model redesign unveiled in February, aimed at boosting competitiveness and returns.
Diageo held up while the rest of London’s blue-chip stocks slipped ahead of the Bank of England’s rate call, a muted reaction that points to investors having already priced in an efficiency push. The market doesn’t see this as a sign the weak sales trend is over.
Slow quarter for Diageo as North America drags on results. Fiscal Q3 net sales were up 2.3% at $4.48 billion, and organic sales ticked just 0.3% higher, but North America dropped by a high-single-digit percentage. “North America remains our biggest challenge,” CEO Lewis said. He said Diageo’s offer needs to be more competitive. Diageo
Lewis has moved to cut prices on certain Casamigos tequila lines and warned that fixing North America will take longer than other efforts. Richard Scrope, manager of VT Tyndall Global Select and a Diageo holder, said last month, “It’s early days for Dave, but he does seem to be grasping it.” Reuters
The issue goes beyond Diageo. When Diageo lowered its outlook and dividend in February, Pernod Ricard and Campari shares dropped too, on worries over softer U.S. and Chinese demand for spirits. Goodbody’s Fintan Ryan said that move was “just the trailer, as it were, to the big performance.” Reuters
Tesco veteran Lewis’s track record keeps investors watching. Bradwell, who runs money at ClearBridge UK Equity Income, thinks Lewis has “the right toolkit” to fix things. But Bradwell said the main question is what happens to Diageo’s premiumisation push — the plan to sell more high-end drinks — as buyers start moving to cheaper, ready-to-drink options. Morningstar
Cost cuts help profit, but they don’t boost demand. Morningstar’s Verushka Shetty said the savings “will not fully offset cyclical headwinds,” pointing to weak demand tied to the cycle. More price cuts on tequila might lift volumes, but margins would take a hit. If the U.S. or China stays soft, Diageo could be looking at another guidance reset. Morningstar
Next up is Aug. 6, when Diageo puts out full-year numbers and a strategy update. Investors want hard figures—jobs, cost savings, brand spending, and details on how the company plans to get North America growing again. Until those hit, shares will likely move on what the company does, not what it says.
