economy
CNBC UK Exchange: Diageo’s turnaround test
The world's biggest spirits company has since seen its share price more than halve as its fortunes have waned.
TL;DR
- Diageo's share price has fallen by more than half since hitting an all-time high in January 2022.
- The company's fortunes waned due to inflation, lax inventory management, and tariff uncertainty.
- New CEO Dave Lewis is set to detail his turnaround plan, expected to include cost cuts and potential disposals.
- Lewis previously earned the nickname 'Drastic Dave' for his cost-cutting success at Unilever and his rescue of Tesco.
- Potential disposals include Diageo's stake in Sichuan Swellfun and speculation about its stake in Moët Hennessy.
- Lewis plans to adjust pricing strategies to appeal to a broader customer base, moving away from an exclusive focus on premium brands.
- Investment will increase for thriving brands like Guinness to expand their global reach.
- Diageo is a significant contributor to UK food and drink exports.