Diageo, the world’s leading spirits producer, is bracing for a critical assessment of its performance as fresh CEO Sir Dave Lewis prepares to unveil his strategy next week. The company’s stock has experienced a turbulent 12 months, declining by over 15 percent, with a significant drop in November following forecasts of low to mid-single-digit operating profit growth for the year ending June 2026 – a downward revision from previous mid-single-digit projections.
The November announcement triggered a more than six percent slide in shares, compounded by concerns over a $200 million (£153m) impact from US tariffs imposed by President Donald Trump. However, the appointment of Lewis in November 2025, effective January 1, 2026, has begun to shift market sentiment, with Diageo’s shares gaining 15 percent year-to-date, according to analysts at AJ Bell.
“Diageo’s shares are finally showing a little more spirit after a terrible run,” said analysts at AJ Bell. “Whether this is specific to the company, or part of a wider recovery for unloved consumer staples plays, is not easy to divine but new chief executive Sir Dave Lewis will be pleased to see it all the same as he prepares to put his stamp on the company.”
Lewis, known for his turnaround of Tesco as group chief executive from 2014 to 2020, earned the moniker “Drastic Dave” during his nearly three decades at Unilever, where he focused on cost-cutting and streamlining operations. Analysts anticipate that Lewis will bring a similar approach to Diageo, addressing what some describe as a “fat and happy” culture within the organization.
Diageo, whose portfolio includes brands like Johnnie Walker, Smirnoff, and Captain Morgan, is expected to report a three percent drop in sales and a four percent decrease in profit in its full-year results on Wednesday, resulting in a pre-tax income of $2.7 billion. The company’s profit margins have been under pressure as consumers increasingly opt for lower-alcohol alternatives and more affordable spirit brands.
Richard Hunter, head of markets at interactive investor, noted the uncertainty surrounding the sector, stating, “It remains to be seen whether the concerns overhanging the sector as a whole are cyclical or societal.” He added, “There is some debate as to whether the younger consumer market is a growth area at all given changing attitudes, although the growing proliferation of the “moderation”, low to no-alcohol drinks could provide an opportunity.”
Lewis’s appointment followed the unexpected departure of former CEO Debra Crew in July 2025, after just two years in the role. Crew’s tenure was marked by a profit warning issued five months into her leadership, stemming from misjudged sales trends in Latin America, a key market for Diageo. Diageo’s annual report revealed Crew’s remuneration increased from $3.8m to $4.8m in her final year.
Prior to joining Diageo, Lewis served as Chair of Haleon, a global consumer healthcare company, since its creation in 2022, and is a non-executive board director of PepsiCo Inc. He stepped down from the Haleon role on December 31, 2025, to focus exclusively on Diageo.