LONDON, March 12, 2026, 16:01 GMT
- Diageo slid roughly 3.8% in afternoon London trading, hitting the same low that marks the bottom of its 52-week range.
- Johnnie Walker’s parent rolled out Red Soul on Wednesday, pitching the sweeter Scotch toward first-timers and budget seekers.
- February’s guidance cut, a trimmed dividend, and net debt at $21.7 billion are all still being processed by investors.
Diageo dropped around 3.8% in London afternoon deals Thursday, settling near 1,434.5 pence. The stock traded between 1,433 and 1,485 pence, landing right at the bottom of its 52-week range.
The drop sharpens the pressure after February, when Chief Executive Dave Lewis slashed Diageo’s fiscal 2026 organic sales forecast to a 2%-3% decline, cut the interim dividend in half to 20 cents per share, and pledged a wider restructuring. Organic sales exclude currency effects, acquisitions and disposals.
Diageo rolled out Johnnie Walker Red Soul on Wednesday—a sweeter Scotch targeting newcomers and those not typically drawn to whisky. “A more affordable price point,” is how John Williams, Diageo’s global whiskey director, described the aim, pointing to consumers looking for something smoother and easier. Diageo
That lines up with Lewis’s comments at the half-year mark. He flagged softer U.S. spirits results, blaming squeezed disposable incomes and rising competition from budget brands. Lewis also mentioned that a more detailed strategy would reach the board in the second quarter, with a public update to follow in the third.
Behind the selloff, the numbers didn’t impress. Reported net sales in the first half slid 4% to $10.46 billion. Organic net sales retreated 2.8%. Free cash flow edged down to $1.53 billion, while net debt sat at $21.7 billion as of Dec. 31.
Lewis is signaling a bigger shift. According to Reuters, he’s pushing for stronger category strategies, improved customer service, and more variety after highlighting Diageo’s weak presence in low-cost spirits. The company’s already lined up the sale of its East African Breweries stake—a move set to cut its net debt to EBITDA ratio by roughly 0.25 times, it said.
The February reset didn’t go over quietly. “Awful results,” AJ Bell’s Dan Coatsworth said. Goodbody’s Fintan Ryan brushed off Lewis’s first steps as just “the trailer” ahead of the full strategy roll-out. Reuters
Diageo isn’t the only one feeling the pinch. Reuters pointed out that its warning in February sent shares of Pernod Ricard, Remy Cointreau, and Campari lower too, showing just how much sluggish demand in the U.S. and China is weighing on the broader spirits sector.
But a rebound isn’t guaranteed. Lewis has pointed to consumer spending pressure as the main concern, while Diageo’s half-year numbers highlighted ongoing tariff costs and Chinese white spirits weakness as lingering drags. If lower-priced launches just boost volumes by diluting the product mix, margins might remain stretched as the company focuses on cutting debt.
Lewis is set to lay out the complete plan before the year wraps up. For now, Diageo shares are stuck close to their 52-week lows, with investors holding back for clearer proof that this turnaround will stick.
