Diageo chief executive Dave Lewis is set to outline details of a company shake-up this week that could mean job cuts across the business. Lewis took the helm in January at the FTSE 100 group, whose brands include Guinness, Johnnie Walker whisky and Smirnoff vodka.
The former Tesco chief executive, known as "drastic Dave", will provide clarity on his strategy at the group's capital markets day on Thursday (6 August). Staff have reportedly been told of plans for considerable cuts, with some teams to be reduced by half and some offices set to close.
Lewis's strategy is also thought to focus on making the group's portfolio more competitive. This includes a focus on the growing category of "ready to drink" canned products and a refresh of prices to appeal to cash-conscious consumers.
Financial performance and US demand
Diageo shares are up 2 per cent this year, but they are down by more than 50 per cent over the past five years. The group will also reveal its results for the year to 30 June.
Analysts expect annual sales to have declined by 2.1 per cent to £14.5billion, blaming weak demand in the US. Profits are set to be flat at £4.1billion.
Investors will be hoping for news of a World Cup related sales bounce this summer across the World Cup period from June to July.
Guinness growth and analyst reaction
Despite weak spirit sales in the US and Latin America, demand for Guinness has been booming after gaining traction among young women. Famous fans Dua Lipa and Olivia Rodrigo have helped it boost sales in Europe.
Chris Beauchamp, chief market analyst at IG, said: "Diageo has the potential to be one of those alternatives to AI that investors are so keen on at present, but there is a lot of work to do."
